 Okay, we're back. This is Dave Vellante at Wikibon.org and this is Silicon Angles theCUBE. We're here at 590 Madison Avenue. IBM had a big announcement today. All in, a billion dollar investment in Flash. And we're here with Laura Gio, who's the business line executive for storage, a CUBE alum. Laura, welcome back. Thanks for coming on. Thanks, Dave. So, big news today. You guys announced an investment of a billion dollars in Flash. You announced some competency centers. You rebranded the Texas Memory Systems products. So, you must be excited. We're very excited. Great announcement today. This is going to revolutionize the industry in our view. As you heard earlier from Steve, this is a tipping point when you talk about storage and what we can do for clients. The customer stories were good. I mean, I had the pleasure of hosting a panel. It was interesting just to hear them talk about how they're dropping this system in and has immediate impacts on their business. People used to think Flash was very expensive and it is still relatively expensive, but they're finding ways to justify it, aren't they? What are you seeing in the customer base? Absolutely. When you look at tier one storage that clients have today and the actual costs that they're spending on that, this is right in line with those costs. So, as you heard a number of clients say today, they're calling this their tier zero environments. And from a cost perspective, really helps them out in their infrastructure. Add to that the reduction in costs in floor space and electricity and power and all those other things associated. So, when you're in the field with customers, what are you seeing? Are they starting to do serious business cases? Are they just saying roll it in? What's the dynamic like? What's the conversation? I think you're seeing a couple of different things. Some clients are rolling it in and putting it within their infrastructure, but it's really a phased approach. And one thing that we announced today was the combination of the Flash systems with sand volume controller. This allows a client to very easily roll it into their infrastructure, utilize what's already there and add that Flash device and see the benefits immediately. Yeah, so the number of the customers were saying that basically they're looking at Flash as just another tier zero. They're going to keep everything else intact behind the SVC. SVC has really kind of changed. That whole storage hypervisor has really changed the way in which a lot of people provide storage, pick up stranded assets. I was surprised a little bit to hear they're putting Flash behind it. You don't think of Flash as being isolated, but it's still able to dramatically improve the performance of the systems. Is that what you're seeing in the field? Absolutely. But people are putting this behind SVC as opposed to isolating. Yeah, so clients have really adopted SVC over the 10 years that it's been in the marketplace. This is a great way for them to have that insurance policy to start with. They put it in their infrastructure, but it's not all in in the beginning. They see how it reacts there and then I think over time you're going to see them going to complete Flash systems. Yeah, so the competitive landscape is starting to heat up. I mean essentially you had a lot of startups come out of the gate, you've had Flash on the server side, you've had all Flash arrays. The Texas Memory Systems acquisition for you guys really got you into the game in a big way and now you're making further investments. Talk about that a little bit, the progression, where IBM has come from and where it's going. So we've been looking in this space for quite some time now. We've OEM'd some of the vendors that we've been utilizing. We found this company, we've invested in them, brought them into the fold. The engineering aspects of what Texas Memory brings to the table plus the billion dollar investment that we're doing in R&D is going to make this the top notch leader in the marketplace. So where are you guys at now in terms of scaling TMS? They obviously didn't have the marketing and global reach that IBM had. Are you where you want to be now? It's still got a little bit more to go. Are you on the rocket ship? Where are you? We're on the rocket ship right now. I mean, we just got them into the fold. They're a great engineering company and that's what we look for when we bring companies into the IBM fold. What they needed is the power of IBM behind it, the sales, the marketing, all those tools to really advance this. That coupled with research and development where we're in number one and have been for 20 years, nothing's going to beat us out there. So Laura, you run the entire portfolio but where does Flash fit in? You've got a sort of a separate Tiger team approach going on with Flash and how does it relate to sort of your overall portfolio? Share with us that. So like any acquisition, they're kind of held off to the side in the beginning, getting their feet on the ground, getting things rolling out. But from a storage perspective, very much being integrated across the portfolio from the enterprise side all the way down to the store-wise family of offerings and how that fits in. So clients can't just look at this as a tier zero offering. They can actually start looking at this as how do I help my medium-sized businesses here? So what do you think? Does tier zero kind of eat tier one and then tier one just sort of gets repositioned as part of the bit bucket? What's your scenario? What are customers telling you in terms of how that whole tiering will play out? I think right now since it's in a new spot within their infrastructure, they're trying to figure that out. So for now calling it tier zero, it could completely replace that infrastructure. What they're trying to balance is what is the value that it brings to my company and what changes do I need to make to implement it? Like anything new, there's a little skepticism early on, but I think once again being able to introduce it in the overall array behind a sand volume controller is a great way to start. Yeah, so in a lot of that value you're seeing today is the pure economics of not doing things like short stroking disks and wide striping and all these unnatural acts that we talk about. Longer term, do you see the potential to even create more business value by changing applications and then changing the way in which system infrastructure is designed? Absolutely, looking at analytics and what we can do with Flash and the analytics. I think what you see and IBM's the only company that can do that is that blur those lines over time between storage and processor in memory work with Flash near line. What is it that we can do? And then from an analytics perspective, being able to have clients solve those problems quickly. We heard an example today about being able to catch the bad guys quickly, being have a millisecond response times, being able to access that data, process it and then respond to that quickly. So you're in the field, you spend a lot of time with customers. Why do you win? Why sometimes don't you win? I think we win because we have that end-end solution for clients. Sometimes maybe if we don't win, clients are stuck into that very siloed infrastructure. I heard a comment today talking about IT. Is it infrastructure technology or is it information technology? We're really an information technology company and we're trying to get away from those silos of just talking about storage in that silo. Takes a while but we're getting there. All right, Laura, great to see you again. Always a pleasure. Thanks for coming on theCUBE and thanks for watching everybody. We'll be right back with our next guest here from 590 Madison Avenue at IBM. This is theCUBE. I'm Dave Vellante of Wikibon.