 Live from Boston, Massachusetts, it's theCUBE, covering Red Hat Summit 2017, brought to you by Red Hat. Welcome back to theCUBE's coverage of the Red Hat Summit. I'm your host, Rebecca Knight, along with my co-host, Stu Miniman. We are joined by Jim Wasco. He is the Vice President of Open Systems at IBM. Thanks so much for joining us. Thanks for having me. So before we get into the new ways in which IBM and Red Hat are working together, give us a little history on the IBM Red Hat Alliance and contextualize things for us. Oh, sure, sure. So we started with Linux back in the very late 90s as a strategic initiative for IBM. And so Red Hat was one of the key players at that time. We worked with other Linux vendors who no longer exist. Linux Care was one of the companies we worked with, Mandrake, things along those lines. But Red Hat has been a constant through all of that. So we started in the very early days with Red Hat. And we had an x86 line at the time, and then as well as PowerNZ. And even in the very early days, we had ports of Red Hat running on all of IBM's hardware. And the alliance is going strong today? Yes, it is, yes it is. So we have that long history. And then as Red Hat transformed as a company into their enterprise software, and well in particular, that really matured as far as our relationship was concerned. And I'm the engineering VP with Red Hat. And we've just had a very strong collaborative relationship. We know how to work upstream. They obviously work very well upstream. We've worked in the Fedora project as a staging area for our platforms. And so, yeah, we've known each other very well. I've been working on Linux at IBM since November of 2000. Yeah, Jim, so IBM, long history with open source. I mean, I remember when it was the billion dollars invested in Linux, we covered on theCUBE when Power became open power. Companies like Google endorsing open power. Bring us up to speed as to open power, how that fits with what you're doing with Red Hat and what you're talking about at the show here. Oh yeah, so open power was really about opening up the hardware architecture as well as the operating system and firmware. And so, as that's progressed, Red Hat has also joined in that open power initiative. If you look at when we started, just as small group of companies kicked it off, and today we're over 300 companies, including Red Hat, as a part of the open power foundation. They're also board members. So, as a key partner and strategic partner of ours, they've recognized that it's an ecosystem is worth participating in because it's very disruptive. And they've been very quick to join us. Well, that's good. We talked to Jim Lighthurst about how they choose and they look for communities that are going to do good things for the industry, for the world, for the users. So, it's a nice endorsement to have Red Hat participate, I would think. Oh, it is, because they don't enter anything lightly. And so, their participation really is a signal, I think, in the marketplace that this is a good strategic initiative for the industry. Where do you see as the biggest opportunities for growth going forward? Opportunities for growth, there's quite a few. A lot of people don't realize that Linux is really the underlying engine for so many things that we do in the technology world. It's everything from embedded into the automotive industry. If you've got on-board computer, which most new cars do, 80% of those are Linux. If you talk about web-serving, websites, front-ends, it's Linux. I know with my mom, she's like, what do you work on? I say, Linux, and she's like, is that like Windows? And I'm like, no. And then I tell her, mom, you've used it probably a dozen times today. And then I give her examples. And so all the new innovation tends to happen on Linux. If we look at hyperledger and blockchain in particular, good example, that's one that takes a lot of collaboration, a lot of coordination, if it's going to have a meaningful impact in the world. And so it starts with Linux as a foundation to it. So any of those new technologies, if you look at what we're doing with quantum computing, for example, it takes a traditional computer to feed it and a traditional computer for the output, and we don't have time to go into the details behind that, but Linux fed as a part of it, because that's really where the innovation is taking place. Jim, could you expand a little bit more on the hyperledger and blockchain piece? A lot of people are still, I think they understand Bitcoin and digital currency there, but it's really some of the distributed and open-source capabilities that these technologies deliver to the market, have some interesting use cases. What's the update on that? Ah, that's a good question. So a lot of people think of Bitcoin, and that's a very limited use case. As we look at hyperledger, we notice that it could be applied in so many more ways than just a financial kind of way, where we've done it as logistics and supply chain. We've implemented it at IEBM for our supply chain, and we've taken data from Weather.com, company that we acquired, and we use that for our logistics for end of quarter, for example. So that's something that was easier for us to implement because it's all within our company, but then we are expanding that through partners. So that's an example where you could do supply chain logistics, you could do financials, but really in order for that to work, because it's a distributed ledger, you need everybody in the ecosystem to participate. It can't be one company, it can't be two companies. And so that's why very early on we recognized we should jointly start up a project at the Linux Foundation called Hyperledger to look at what's the best and how could we all collaborate because we're all going to benefit from it, and it will be transformative. So what are you doing there? Because as you said, these do present big challenges because there has to be buy-in from everyone. Yeah, so if I look at the Hyperledger project specifically at the Linux Foundation, we've got customers of ours like JPMC for example, founding member and participant, we've got distribution partners, we've got technology partners all there. And so we contributed early code, stuff we'd done in research as kind of like a building block. And then we have members both from research and a product development side of the house that are constantly working in that upstream community on the source code. And continually contributing and is there, okay. Yeah, continually contributing and that's on the technology side. On the business side, we're doing early proof of concepts. So we worked early with a company called Everledger that looks at the history of diamonds and tracks them beginning to end. And the ultimate goal of that is to eliminate blood diamonds from the marketplace. And so if you know, it's also a very good market to begin because it's a limited set of players. So you can implement the technology, you can do the business processes behind it and then demonstrate the value. So that's an early project. Most of the financial institutions are doing stuff whether it's stock trading or what have you. And so we're doing early proof of concepts. So we're taking both technology and business, you marry them together as Jim Whitehurst said the other day, what's the minimal viable product? Let's get that out there, let's try it out, let's really, really soften. Yes, and then modify quickly. Don't start with something that you think is overly baked and find that you have to shelve it in order to kind of backtrack and make corrections. And what is it like to mesh those two cultures, the technology and the business? I mean, do you find that there is a clash? We have not. Now at IBM, it was not a simple transition back in the late 90s. There were people that thought open source would be just a flash in the pan. And here we are so many years later, that's not true. And so early on, like I said, there were a lot of internal kind of debates, but that debate is long since settled. So we don't have that. And if you look across our different business divisions even within our company, whether it's cloud, whether it's cognitive, whether it's systems business, all use open source. Whether we contribute everything externally and we're using third party packaged or we consume it ourselves. And we see that as happening across the industry, even with our clients. Some that you might think are very traditional, they recognize that's where the innovation is taking place. And so you always look at balancing, is this viable, is it healthy? Or is still the commercially available stuff the better stuff? Just a quick story, I had a development team and we were doing Agile and we needed a tool to do, to track our sprints and everything like that. And so all of my developers were open source developers and so that's their bias. If we're gonna use software, it has to be open source. They went and evaluated a couple projects and they found open source software that had been abandoned. They were smart enough to recognize we also acquired a company called Rational and Rational Team Concert does this, but it's proprietary. And so they initially resisted it, but then they looked at these open source projects and saw if we pick up that code, we maintain it forever and we're alone. That's as worthless as it can be, because there's no benefit. Doing open source where you have multiple people contributing, you get an added benefit. So they went with our in-house stuff, Rational Team Concert. Just showed the maturity of the team that even though they think open source is really the best thing in life, you got to balance the business with it. Jim, so if we look at the adoption of open source, it took many years to mature. Today, talk about things like cognitive, it's racing so fast. Give us a little bit of a look forward. What's changing in your space? What are you looking forward to? What would we expect to see from you by the time we come back next year? Sure, so a lot of what you've heard here at the conference, so a lot of things that we're doing are often offered in a cloud platform or as a hosted service or as a service. So for example, we do have blockchain as a service available today and it's running, the back end is mainframe cloud, for example, running Linux. Other examples of that, looking at new applications for quantum computing. Well, that requires semi-genic freezing in order to keep those qubits alive. And so that's a hosted thing and we actually have that available online. People can use that today. So I think you're going to see a lot of early access, even for commercial applications, early access so people can try it and then based on their business model, like we've heard from clients this week, sometimes they'll need it on-prem and for various business reasons another time they can do it on the cloud and we'll be able to provide that but we give them early access via cloud and as a service. And I think that's what you're going to see a lot of in the industry. And it's this hybrid mix as you said, some on-prem, some off-prem. Yes, yes. Well, Jim, thanks so much for joining us. We really appreciate you sitting down with us. You're welcome and thanks for your time. I'm Rebecca Knight for Stu Miniman. We'll have more from the Red Hat Summit after this.