 The Cube at IBM Impact 2014 is brought to you by headline sponsor IBM. You're your hosts, John Furrier and Paul Gillan. Okay, welcome back everyone. This is Silicon Angles The Cube, our flagship program. We go out to the events and extract the signal from the noise. I'm John Furrier, the founder of Silicon Angle. And joining my co-host, Paul Gillan, Silicon Angle. We're here with Kevin Custis, the global leader of mobile social business for IBM Global Business Services, which is huge. I mean, IBM Global Services is well known, has delivered amazing value over the years. When we were just talking about yesterday at the 50th anniversary of the mainframe, they're doing it for decades and decades. Welcome to The Cube. Thanks so much, thrilled to be here. So, you know, Dave Vellante and I always talk about when we do these Cube events, we always talk to all the big technology and introduction, new product announcement. But at the end of the day, the meat and the bone is the services angle, which is really, you know, when you put the technology into practice, it's the guys on the street, it's the customers rolling out their deployments. It's one, money's being made, certainly the channel partners, business partners. Money's being made and certainly saved and with the customers. So I've got to ask you, what is the biggest disruption that you're seeing and the impact around this technology of cloud mobile and social with the services? Is it the cycle times? Is it the customers? I mean, what is the big disruption points? Yeah, thanks John. I mean, I think you're right. The services angle is one of the most exciting in that we get to put these technologies to use, experience those disruptions up close with our clients. I've been doing services and working on large-scale transformation for, I guess it's scary, almost 20 years now. And I'll tell you through all the waves of sort of technology change we've been through, there's no question that mobile, social, you know, these technologies are having a huge disruption and it's the discontinuous nature of work. So we see the disruption in a couple of areas. One is engaging consumers and sort of the first wave we saw a couple years ago was just getting traditional web apps out and extended. But now the innovation in terms of how that engagement can occur, how personal it can be, if you're not thinking that way, you're absolutely going to get left behind and any small startup can really get between you and your customer. Within the enterprise, we see large disruption to all-round process first and that leads to then questions around operating model and then the final disruption we see is in business model itself. How are we making revenue? How are industries transforming? So we see mobile as really one of the big catalysts along with analytics around these changes. What industries in particular would you say have in which industries is mobile the most compelling priority right now? Should they really be going mobile first in their development? Right. And we organize around 17 industries and we tell clients every day that no industry is going to be left untouched or undisrupted, so to start planning now. That said, we see heavy, heavy activity in banking, insurance, telco, health insurance. I think the rest of the industry is really disruption. Just now, we're getting into a phase where disruption is occurring in here. Those industries are also at the top of our list right now. I doubt what you say, disruption. What do you mean? Is that something you're attempting to fear? Is that something to worry about? Or are you worried about disruption? I think it's the degree to which process change is going to be discontinuous, the degree to which revenue models may change, where the very value proposition may shift from a physical product to more heavily software or data-intensive value proposition. So, yeah, I guess if not paying attention, it would be something to be feared, but I really use that to mean the degree of discontinuous change within a process or an industry model. Kevin, I got to ask you, people process all that stuff, you said transformation, you probably heard every single motivating speech you possibly could have heard of. It's every business book, process improvement. We've been there, we've been through, a lot of those books are very relevant, but today it's different, it's a cultural mindset. So, drawing on some of those practices, what is the big people change management process, best practice that you've seen? Is there one, is there the win one for the gipper speech? Is there the magic book out there right now? I mean, what's your experience of the best practice for some of these people's side of the issues? Cultural is a huge issue. It's massive in any change effort, and I see it a little different around mobile and social. I mean, mobile, many people have already changed. From in their personal lives, their engagement with mobile, what they expect out of these technologies, I mean, consumerization of IT, I guess it's very appropriate here. So, many of the big change initiatives when we're talking about mobile, there's a lot of pull from the user. There's more intuition around how this is changing the way they work, and therefore, the value it drives in their personal life. So, I think that's actually the key, whether it's social, mobile, or cloud business model changes. Are we making the direct connection to how work changes and to the impact of the user on the user directly? So, that's sort of the one key around these change initiatives that we really advocated. Just make sure you render explicit that change right down to the individual user. I guess we'll talk about the management now. So, I totally buy that part of the way. The user's already changed. Also, I've heard people say CIO saying, see this iPad, make it run on this. So, what's the update on the management side of the people equation? Do you see the same kind of change adoption or does that pretty much all have mobile phones pretty much, bud? No, I mean, I think the management side of the equation is early dates still from my perspective. I mean, we talked about mobile first, we launched the brand about a year and a half ago, and the premise being that the management would drive fundamental changes in how work happens and how we engage customers. And yet, I'm just now starting to see big change initiatives driven by senior management. Your evidence of that would just be clients engaging us around programs like something would be called X Company Mobile 2020 or X Company Mobile 2015. And really setting out with senior management teams what that vision roadmap looks like. There's been a number of barriers to that, whether that be security, whether that be just technical and sort of architectural clarity, but we're starting to see that shift now. So, I think we're sort of in the first inning of management really driving significant change with these technologies. But we're seeing the landscape change so quickly, you know, by some estimates over 70% of cell phones in the US now are smartphones with remarkable growth in a short period of time. But humans don't accommodate change as fast as technology. So, do you still run into skepticism out there from senior management about, well, do we really need a mobile strategy? Is it really worth the investment? You know, we, I see less and less of that every month. There will have discussions on whether it's a mobile strategy or a digital strategy. And that's, you know, we think it's really both. I mean, it's a digital strategy. We need mobile clarity on the roadmap of mobile initiatives. But fewer and fewer on do we need that? Whether that's healthcare, banking, or right down to an aggregates company, we have senior teams with some of our large, very large industrial companies. You wouldn't think would be at the front of that list that are now really looking at, okay, let's put this strategy in place. How about B2B specifically? I think we understand that for consumers, mobile is a must have now. But for companies to sell primarily to business buyers, are they seeing the compelling reasons that the consumer companies are? Yeah, I mean, I think the business to, I think the answer is absolutely yes. I mean, it's not always, in that customer relationship, there's still an expectation for real time decision making, for improved clarity of transparency of product and choice. And also, you know, a lot of the value is coming from just business to enterprise. I mean, on core process transformation, making yourself easier to do business with. So we see business to business as being as compelling as business to consumer and business to enterprise, also being where a lot of the value is being driven right now. Have you seen any applications in the B2B realm, specifically, that have surprised you, where companies have found value where you wouldn't really expect it? No one are coming to mind right now for me that are particularly surprising. I mean, the sort of breadth of use cases right now that we're seeing in enterprise are on very traditional, well, I don't know if they're traditional, but they're along themes like workforce and talent management, themes like asset management or supply chain and operations. Field service has been done, but it's now being done a lot better when we combine that with asset management, with internet of things and the analytics that sit between those dimensions. You know, we see traditional areas like field service being done a lot better now from a mobile point of view. That's the one thing that has been a little bit surprising is processes that have been well done and optimized, even mobilized. A study we just did called the Upwardly Mobile Enterprise pointed out that leaders that are really driving explicit mobile strategies are seeing still 20% improvement in productivity in those already optimized processes. Kevin, talk about the IBM machinery for a second and we'll tie that to the go-to-market with the customer environment. Obviously a lot of action. You know, I was just saying to Steve Mills, it's like you're walking in North from you, you see the suit on the rack. I want that suit. IBM has a good story right now. It's all hanging together. Maybe a little scarf needed, some gloves and some shoes, but right now the story and the technology is very relevant. But with SoftLayer and you have these new acquisitions, how does that impact the go-to-market in terms of sales, motion, partner relationships? It's new, but it's aggressively put out there. Pricing, who owns what? I mean, the fruit and the blender kind of changes the color of the Frappuccino, if you will. So how do you guys reconcile that with the customer base in terms of go-to-market pricing, channel conflict, et cetera? Let me step back from the question for just a minute. I mean, it starts with the number of things that takes to be successful with the mobile strategy and with the deployment. And one thing that we see is clients move from experimental phase, five to 10 apps to scaling this across a couple functions, 10 to 20 apps, and then really becoming a mobile enterprise where we're into hundreds of applications released more often. With that, there's realization of the need for some more of these components. So first of all, from a services point of view, we've got an entire team working on, I'd call it mobile IT strategy, but advising the CIO, advising the application BPs around what are the capabilities it requires to scale. And I always say, there's a set of things we've got to do, a set of best practices and capabilities to drive speed and innovation at scale in mobile. So that's a context we like to set before we talk about the product discussions. And then the product discussions hang together a lot better and there's a lot more context for a client. From there, in a services point of view, we're selling services. We team with our software colleagues that in one go-to-market model, we go-to-market together to our primary client set in GBS. There's also some sort of new consumption models that we think are going to be very interesting for our clients. So on one hand, you basically stick it behind the curtain as Steve Mills would, that's not his words, but my takeaway, because he says we'll make it all work out, we'll split it, accelerators, et cetera, that's IBM machinery. But to the customer, it's one face, right? That's kind of the way you look at that. In terms of cross-division. Yeah, cross-division, one face, absolutely. And again, we work in GBS in one way with the top set of clients, probably 2,500 in one manner. And then Steve and his team have got a much, much larger client base. And so we work together with those 2,500 in a very, very close way. And so, yeah, it does work out. And as I mentioned, with some clients, we're starting to see an interest in seeing all that under one contract, one consumable sort of monthly model. So solution as a service, bringing together consulting capabilities, software, and our capabilities from our GTS colleagues, including SoftLayer, into one very consumable model. And that's something that we have in market now. We've announced a set of managed cloud services. And that model really does pull together all the IBM components. The customer experience is so important in mobility. What tactics do you use to test and to iterate customer experience so that you're delivering the best possible experience for the developers? Yeah, I mean, it's absolutely critical. I mean, we've got to define a great solution to start with. We've got to have a really robust set of services on the back end of this equation. But if that experience isn't second to none, we know that we're not going to get out of the gate. So first thing we do is we invoke our team, we call IBM Interactive Experience. And we announced about four weeks ago a new capability, or an extension of a capability we've had for years called IBM Interactive, which is our digital agency. That digital agency, in fact, at age, announced them as sort of the number one in the world by size today. So within there, we've got a team called IBM Interactive Experience Mobile. And this is sort of the foundation capability within the mobile studios that we announced at the conference, 18 of them this week. So within there, we've taken world-class UX talent as well as great mobile designers. And we've really trained them all in the discipline of design. And they go through a set of methodologies collaboratively with clients to first envision the experience, map that journey out, quickly prototype that, put it in market with a test set of clients, and continually iterate that. Of course we use tools like IBM offers in the mobile tea leaf capability to be able to rapidly iterate on what we learn from feedback with those customers. So you choose the customers to, you'll help them choose the clients, the customers to test the solution and to give them feedback. Either they'll have those segmented or else we'll help them with that. We've been talking about the, with the big data theme here at the conference about the growing role of the chief data officer. Do you think that there'll be a chief mobility officer or really who should own mobile, if anyone? Yeah, we do see all over the map in the study we did called definitely mobile enterprise I referenced. We still saw a heavy ownership from the CIO but with compliment from CMO and line of business. But the chief digital officer is a role that oftentimes owns mobility. So right now, as I mentioned, I think we're in the sort of first inning around true transformation, mobile first. And right now what I see is chief digital and CIO, typically each of those having a mobile leader, mobile strategy leader, the case of digital, mobile leader from a CIO organization point of view. So those are roles we're definitely starting to see emerge. Talk about some of the challenges around multi-vendor support when you have a open source component. I've heard from customers directly, just happened to be IBM Global Services that manages a big bank, come to me and said, I love OpenStack. And I go, what do you know about OpenStack? Not going to say the name of the company or the name of my friend, but he said, I don't know anything about it. All I know is I can look under the hood and make modular changes to it. And oh, by the way, I need POSIX compliance and I need IBM to support my Red Hat and my NetApp drives and my EMC drives. Okay, so IBM supporting. So again, that's typical use case, I'm sure not typical, but like a kind of environment that you guys are usually supporting. So you bring in this OpenStack element where this is just, they want a bridge to the future. That's the number one thing we've heard. And so you guys are in these environments. So what are the big things that you guys do differently from some of the other bigger players that have their own stuff, like HP and other companies that have their own services? Is there any differentiators around that? I mean, what can you share around that? Because that's pretty typical. Multi-Vent has been around for a while, but like, what's different with cloud? What are some of the key nuances that you can share? I mean, I think our teams run into heterogeneous environments all the time, as you said. And when we look at all the components required to be successful in mobility, our services teams expect that. So we lead with those reference architectures. We lead with the IT strategy capability to really help clients work through what stack makes the most sense in the long-term, both near-term and then as they evolve in the long-term. From a support point of view, we've got to be ready to support those multiple environments. So I think the ability to have talent that can scale across all of those is really what we're great at. And then applying underlying methodology to be able to manage those capabilities efficiently. So that's some of the capabilities that we've- Is mobile the top priority for CIOs and CXOs? And how does the data equation come in there? Because, we were talking earlier with Bob Pachiano, and he's saying the big data equation is great. The number one goal is to get that data into the application environment, right? So, which is developer issue and also app issue on the mobile side. Is that a top issue, or is that still kind of lower in on the wish list? I think both are top issues. I think those are the top issues. I mean, what we hear from many of the analysts here at the event is that their mobiles went from, lower on the list, three to five to either number one or two for CIOs. And, you know, big data in analytics is probably number one. I mean, I mentioned earlier, I see analytics in mobile as sort of the disruptors and sort of cloud as a major enabler and social playing in many of the use cases. So, mobile's quickly, quickly risen up in terms of priorities with our CIO problem. Okay, so I got to get a temperature from you on the real-time actual insights. Real-time is a game changer. We've been hearing about it. I mean, we're big fans of real-time, about real-time content, we're broadcasting live, we look at the crowd chat going, but for businesses, where are they at when you work with engagement with the customers around real-time? Because that's kind of a really a mind-bender at some level for customers. I mean, it's a radical shift, not radical, but it's naturally a radical evolution. You sit down and do a planning meeting, you have a huddle, what happens? I mean, are the cycles short? Is it, what's the time to value on the mobile piece there around real-time? I mean, I think we've been working around this concept for years, haven't we, with technology executives, and I've done a number of retail use cases 10 years ago where we thought how great it would be to have closer to real-time, and right now we've got several clients that I'm thinking of that we're working on, you know, really in terms of real-time offer management, real-time engagement, a lot of excitement there, so it is a mind-blower. I mean, really getting down to one-to-one is what we're seeing the aspiration as, and I think now people are starting to believe it and getting their head around what it's going to take to make it happen, so real-time, one-to-one, on the road map of most of our clients, both from a data and a mobile point of view. What industries are you seeing where mobile is actually creating competitive advantage right now to the greatest degree? I mean, I think, Retail, we would assume, would be one. Retail's an obvious one, yeah. I think all of those that I mentioned are candidates. I mean, banking, we don't think we've really seen it yet, although we haven't seen the disruption in banking, but in fact, Bank of Montreal presented here, they were last in the app store, they worked with us, put a new design together, put some interesting features. One of the ones they highlighted was just the ability to notify when you're going out of the country, so your credit cards don't get shut off. They became number one in the app store, so there's a, you know- What did the game share? So to be determined, this is new, but certainly from a brand point of view, they're gaining advantage, and does that translate to share points we'll see. I guess I wonder, maybe the bigger question is, we were talking about social business earlier, we still have that question of the ROI of having a social strategy. Are we going to have the same question about mobile? In two years from now, our CEOs are going to be looking back at us and say, well, what was the payoff? Yeah, I think in mobile there's no question in social, there's strong evidence of payback as well, but in mobile, when we, you know, the evidence we got back, 20% improvement in cost in a process. I mean, if I'm working in the aggregates or petroleum industry or natural resources industries, I don't have that kind of margin. If I can take 20 points out of my cost structure by iterating on mobile, there's no question there's going to be an advantage there, at least that's my perspective. And we're working on this right now in our next iteration of our study with our Institute for Business Value to really look at the evidence behind value creation, competitive advantage. So it's a great question. I think those are the top industries, but I think all industries are candidates for competitive advantage with mobility right now. On the future of the data center, we always like to talk about the software defined data center. Are you hearing much about that in terms of the customers? Obviously that's a big trend off network virtualization, which is changing the converge side of the business. Now you guys kind of are letting go of your low end X86 business, which on the server side would have power systems. What are some of the conversations there? Is there a transitional period? Are you having customers saying, hey, you might swap out some suppliers here, maybe go to another vendor, but I'll use power rate. Do they know about that? I mean, you've got all that stuff going on. Yeah, I spend, in our GBS services team, I spend a lot less time with clients on those issues. Our global technology team spends a little bit more time. So I don't really have a very informed point of view for you there this afternoon. You mentioned the study, the upwardly mobile enterprise. You're doing this with another study with the IBM Institute for Business Value right now. What are you trying to find out with that study? Yeah, the first study's concluded about 600 clients and really there we were looking for just, what are the practical things going on today? Where is the value being created and what are the sort of 101 lessons in mobile deployment? So as we prepare for this next study, which we haven't launched yet, but we're just preparing for it, what we're looking for now is more the other end of the spectrum is where's the bleeding edge of innovation occurring and what are the sort of value that's actually being driven to your point around competitive advantage? So the first one was actually what are the use cases that are being driven and what defines leadership versus aspiring leadership? That's the one we've concluded. Now we're looking for really where's the disruption, where's the sort of bleeding edge innovation and what does that mean for various industries? You mentioned the value of taking 20 points out of your cost structure. Thinking of what Maribel Lopez said when she was on theCUBE yesterday that internal applications are what are driving external applications. In other words, the money is all being, the payoff is all internally and that's what's enabling companies to experiment with external applications. Have you seen the same thing with your customers? Well I think we've seen that in social and we are seeing that in mobile. I don't know, the value internally is very tangible. We could get our hands around it, it's cost, so whether it's cycle time or shifting operating models, I've got a very, very tangible way to count the benefits there and then it gives me a case to invest externally. I think even the external cases with mobile are fascinating now in terms of engagement. Maybe harder to put our hands on am I getting more share of what's the corollary? But yeah, so we do see that. I mean, I think that both the driving value, we could count it more tangibly internally and that helps us make a case to fund mobile across a broader set of use cases. Kevin, thanks for coming on theCUBE. We really appreciate it. I want to give you the final word, share with the folks out there to end this segment. Explain to them what's going on with Global Service that they may or may not know about what's happening today for IBM, given all the stuff we're going to talk about the complexity of this market. Yeah, no, thanks for spending time and Global Service is dedicated to helping our clients with this massive transformation opportunity. We mentioned it's the biggest thing I've seen and we've scaled this business from a few hundred consultants to several thousand now and we could continue to do that. We're helping really, I think of it this year in terms of really accelerating the journey that you as clients are on. A couple of things we've done is we've put points of presence with our interactive experience team in markets around the world. We just announced 18 together with Marie Week and with our GTS colleagues this year. So wherever you are in the world, we've got mobile experts, architects, designers, strategists ready to help define the experience. The other thing we've done is we've committed to putting together a set of accelerators. So we're really taking our hundreds of engagements we've worked on across our top industries and we're bringing those experiences now in terms of a set of strategy accelerators, business case and really importantly mobile app code, we call it ReadyApps that help accelerate that journey. This is all about speed to value experimentation and getting started. So GBS is committed to leadership, committed to helping you in market as well as through global delivery and it's got a set of assets to really accelerate the journey. Kevin Cuss is global leader, mobile, social business, two hot areas, it's all about real time, it's all about speed, value, efficiency, all that good stuff, doing more with less, reducing the time it takes to get stuff done. It's all about big data. Thanks so much for coming on theCUBE. We'll be right back with our next guest after the short break, day two of IBM Impact coverage here on theCUBE.