 Hello everyone, this is theCUBE. We're live in Las Vegas for IBM Impact. This is theCUBE, our flagship program. We go out to the events, extract a signal from the noise. I'm John Furrier, the founder of SiliconANGLE. I'm joined with Paul Gillan with SiliconANGLE. Paul, welcome to theCUBE, co-hosting. Such a delight, John. For the folks out there, Paul Gillan's a veteran in the industry. Paul, you've been around the block a few times. Have you seen a few shows here and there from back in the days in computer world? How many books have you written? Five. Five books. The industry is changing a lot. And IBM's always been at the center of it. I want to get your take on the show here. This is IBM Impact. This is their big show they bring as extension to IBM Pulse. We got IBM Edge right around the corner. What is the theme of this show? Why is this show so big for IBM? Well, IBM Impact is really their customer show. And they have a lot of shows that are sort of bunched up together early in the year. And it's kind of hard to tell which one is which. But Impact seems to be the one that brings together all of their major initiatives. So what we're seeing here a lot, John, is we're seeing new processors, the new Power 8 systems family. We're seeing a big focus on cloud and the announcement of cloud marketplace today and also on mobile. And those really are the three big focuses that IBM has going forward right now. So we're going to see a lot of repetition of these themes. This whole theme of reinvention, which is the overarching talk of this show is creating businesses that are more nimble and that are able to reinvent themselves in real time using the cloud. So they're trying to make a stamp of themselves as being a forward-looking company. And they call this, the theme of this show is be first. So that's what they want to be. You know, IBM has always been a big player in the computer industry. You know, just to set the stage here, we are in Las Vegas at the Venetian Hotel, the Palazzo, we're at the convention center, right in the middle of all the action. The Cube is right in the center of the social lounge here. We're going to tell them about social impact. We got the big exhibit hall right across from us. And the action is really all about the customers. And really the big thing here in Vegas is what will IBM do in the cloud? What are they going to deliver to their customers? What are they going to do to answer the threat and the push from Amazon web services in the cloud? And then how are they going to take their existing customers that they've been serving for 50 years with the mainframe? They've been celebrating their 50th anniversary with the mainframe. And IBM has all the right storylines. You're hearing cloud, you're with Bluemix, you're hearing real-time analytics. Paul, they have everything tied together, but where's the meat on the bone? What does IBM have to do to win their customers over and continue to do business with them? I think it's all a matter of execution, John. You know, they've got the story right. They're clearly out front in the big data analytics space, second in cloud, now playing catch up with Amazon. But, and they're late to the game in mobile. But with a good story now, I think across the board, what they have to do is execute and show customer successes right now. And at the opening keynote this morning, I thought it was interesting that IBM opened with a customer kicking off actually the whole conference and had the opening keynote was focused on customer experiences. That's what they really have to show is that people are putting these tools to work out there in the market because, you know, Amazon's clearly got the momentum. They've got the proof points and IBM has got to show that they're in the game as well. What do you think? It's going to be fun to see. I mean, I think Amazon is clearly the, I've always said it's the big wave that's crashing onto the beach and it's just not stopping. It's a tsunami of some sort. The question is, not will Amazon be successful? How much of the beach head does this wave crash into and how much territory does it take? Clearly, people use Amazon, Paul. We are seeing developers loving it from a DevOps perspective, but it's just not enterprise grade ready yet. Some people have been saying it's getting there and certainly Amazon has been making announcements around more enterprise-like features at the last IBM, Amazon summit, we heard that. But being successful in the enterprise requires some really nuanced things. You got to have the compliance. You got to have that legacy integration. You got to have the services and support. There's a ton of stuff. I mean, just little stuff, kind of in between the toes details, supporting Red Hat. I mean, these are the things that sound easy, but as you know, it's really, really hard. And customers aren't really pushing. I mean, I hear customers say, hey, I need to be relevant. I want to have DevOps, but I'm not in a rush to deploy that tomorrow. So I think IBM has some times. I think it's still early innings for IBM. And I think the mobile story is interesting. I'm going to see how that plays out. I'm still not sure how that's going to bake up. But clearly cloud, they're all in with analytics. I think mobile is the big question mark right now because there are so many players in that market and IBM was late to the market. However, in cloud, I think they've got a good story. And the big story you're going to see around cloud is hybrid clouds, you know, which is what Gartner says is where all the action is. Users are going to move to hybrid clouds. They want to keep some of their infrastructure on site while taking advantage also of the public cloud services. Amazon does not have a good hybrid cloud story because they don't have the on premise story. So you're going to see IBM really pounding that idea that of extending your infrastructure through public cloud and with SoftLayer, they've got, I mean, that's their ace in the hole. SoftLayer clearly has the support and the reputation of strong performance, good global support, ability to spin up new instances very quickly. I think it's a story that SoftLayer is a good story for IBM. And that combined with this focus on really enabling the enterprise to move to the cloud in a staged and a reasonable fashion. Not cloud whiplash is what you're going to see them doubling down on because it plays to their strength, which is that on premise enterprise infrastructure. And SoftLayer gives them that new shiny toy in the portfolio, but it really has some interesting perspectives. I was really originally down on SoftLayer. I was like, ah, it's a hosting company. But when you look at what IBM is trying to do, they're trying to offer a broad range of solutions for customers from bare metal to fully integrated cloud with cloud and some of the things that they're doing with BlueMix. So I think what they're trying to do is saying, hey, you know what, Mr. Customer? If you want to go into the hood and do what you need to do, we're going to have some flexibility. And so being agile in the enterprise isn't as easy as saying, doing some DevOps. It really is pretty complicated. And what I love about IBM, Paul, is that we get to talk to all the interesting folks here. And we're going to have two days of wall-to-wall live coverage here at SiliconANGLE. We're going to talk to Steve Mills later in the day at 610 Pacific Time. We're going to hear from Steve Mills, who's a legend in the industry. And we're going to hear from Steve GMs, to tech fellows, to some of their customers. And we're going to ask the hard questions. What is going on? Where's the traction? Where's the product fit with some of the things that are really needed in the market? Because there's clearly a build, grow mentality right now in the marketplace from customers in IT. It's not so much consolidation and doing more with less and reducing the cost and consolidating. Sure, that makes sense. You can commoditize, but there's a growth mode right now. There's a real build-out. So I'm looking for those answers. Where's the progress? Is it inch by inch? Is the ball being moved down the field? How is IBM helping the customers? So that's what I'm looking for. What are you looking for this week with our guests? Well, I'm going to be looking for a lot of more detail on the cloud story and how they're going to differentiate from the Amazon Web Services. AWS is growing like crazy. They've got a great story. They've become the default outsourced infrastructure provider for small companies. IBM clearly is going to have a difficult time competing with AWS on its own territory. What they have to do is present a compelling picture, a compelling story for their traditional enterprise customers. And I think that's where Bluemix comes into the fold. I think SoftLayer is a good story for enterprise customers because it dovetails nicely with IBM's existing strengths. They're pushing SoftLayer like crazy. Remember, Amazon, excuse me, IBM only bought SoftLayer nine months ago and they've already made it a centerpiece of their cloud strategy. So I think we're going to see them doubling down on that strategy. And I'm going to be here looking for the enterprise story. You know, what are their existing customers going to take away from this? Because really, there's the risk of whip last year. They're saying, you've got to go cloud. You've got to go big time mobile. You've got to disrupt your organization, literally, because analytics has got to get you into real time response mode. And this is very disruptive for large organizations that are accustomed to command and control, that are very hierarchical. IBM is basically saying, in the keynote today, you've got to blow all that up. You've got to make analytics drive your business, literally, on a day-to-day basis, changes in your business. So how are they going to make that real for customers that are not accustomed to operating that way? Describe the whip-lash thing, because I mean, I get images of an airbag going off. Is it ripping replays? What do you mean by whip-lash? Well, I think whip-lash, what I mean by that is when you're telling companies you've got to be responsive to your market on a day-to-day basis. And the message we heard in the keynote this morning is you have to organizationally be prepared to restructure your organization almost on the fly. Now, if you're a caterpillar, if you're a city bank, if you're a company that has hundreds of thousands of employees, the idea of changing your organization on the fly like that is a scary thing. And it's one thing to say that, it's another thing to demonstrate how organizations are going to do it. That's why I think the whip-lash comes in. Customers are being told now that they have to really completely transform the way they come to the market. And that is a scary proposition for a lot of these companies. IBM has got to show them that they're going to be the partner that's going to bring them there. Paul, I want to get your take on something because we've been in the industry for a while. You've been covering it, certainly, up and down for many, many years, and living in Silicon Valley for myself, it's always about the shiny new toy, the Uber, the Dropbox, all these companies with mega-valuation. We've heard even PureStore has got a $3 billion valuation. But IBM has been around for a long time. They're celebrating their 50th year of innovation with the mainframe. I was talking last night with someone about Kix, CICS for, it's a bit part of the cloud announcement. And that's a transactional system for the mainframe. What's your take on the mainframe? It's still around. It never died. It's got a little bit of edge here. You're hearing about power systems. Is the old IBM mainframe coming back as part of the cloud equation? Or is that simply just a kind of compatibility mode for existing customers? What's your take on that? And how has that affected IBM? Well, despite all the motherhood that's being given to the mainframe right now, with the 50th anniversary, I don't see it as being a strategic platform for IBM going forward. I think it's a cash cow. I think it's perhaps informative that Doug Bailock, who'll be with us this morning, who's running the power systems group now, used to run the mainframe group before he moved to power systems. So they took that guy and they put him in charge of really the growth platform. I don't know, what do you think? I mean, I had forgotten about CICS, and you've been bringing it up. I know, I was last night, I'm like, well, that's still around. Apparently it is. Coball, I think, is still around too. Some will argue that's still kind of hanging around some of the big banks. But I mean, my take is a little bit weird on this one. I mean, I love the mainframe. It's got a lot of legacy. It's Apple Pie, as you said, motherhood. I love how it's like, you know, the 50th anniversary. I applaud that. And it's really, you know, an industry kind of legend at this point. Hall of Fame, if you will. But to me, and Dave and I talk about this, going back to 2010, when Paul Moritz announced the new VMware framework around VMworld 2010. And we were talking at that time, the cloud is like a mainframe. So if you look at the cloud architectures, it really is a distributed like mainframe. Not literally, but like, from a metaphor standpoint, it's a distributed computer. And a lot of the software innovations going on in the cloud have a mainframe like feel. So seeing Doug in power systems kind of makes sense when you say, hey, we want to bring the power of hardware powered by software. And so to me, I think that's the thing that I think IBM has a unique perspective on. And some DNA. I don't think it's so strategic as a product, but the mindset, you know, and you're seeing that mindset kind of trickle into the cloud. And I think compare that to someone like HP, for instance. You know, where's that DNA for HP? It's just not the same. IBM still has that soul, if you will. So maybe they can bring some of that mojo back. Well, you don't get very far in this industry as you know, John, resting on your laurels and talking about your history. So I think we're going to see IBM go very cautiously about celebrating the 50th anniversary of the mainframe. Nevertheless, they understand that that is the core of their strength. That was something that revolutionized the industry 50 years ago. It made IBM what it became in the 80s. In the 90s, in some ways it was IBM's undoing during the early 90s, but they understand that still, I think I read a statistic, 80% of corporate data is still on a mainframe platform. And so that's the reality. Things don't change all that quickly in enterprise IT. So that is a core strength of IBM. So what they need to do is, as you said, redefining the cloud as sort of the next mainframe, they have to help customers feel comfortable moving gradually to that platform and keeping their compatibility with the apps that they have already running on 360. Well, I think certainly they're in the right direction. Internet of Things, the Edge device, whether it's mobile or a desktop with virtualization, I think it's all going to be software driven. So I really want to find out more about that. We're going to have two days of live coverage here at IBM Impact live in Las Vegas. This is theCUBE, our flagship program. We're going to be covering it. We're going to ask all the tough questions. We're going to hear from IBM. What do they share and what's their core message? And we're going to challenge that about the differentiation, their enterprise story, and really what are they doing for customers? I'm John Furrier with Paul Gillin. We are here live in Las Vegas for IBM Impact. We'll be right back with our first guest after this short break.