 from Las Vegas, expecting the signal from the noise. It's theCUBE covering InterConnect 2016, brought to you by IBM. Now your host, John Furrier and Dave Vellante. Okay, welcome back everyone. We are here live in Las Vegas for exclusive coverage of IBM InterConnect 2016. This is Silicon Angles theCUBE. This is our flagship program. We go out to the events and extract the signal from the noise. I'm John Furrier with my co-host Dave Vellante. Our next guest, we've got two guests talking mobile, Michael Gilfix, who's the VP of IBM Mobile First, and Pete Teigen, the mobile leader of IBM's Institute for Business Value. Now that sounds like, there's a lot of business value in there. Michael on stage on the keynote, Mobile First. Really a big success story. Congratulations. Great to have you guys both on theCUBE. Happy to see you. Thank you, thank you. We're Mobile First World. And you're actually Mobile First in the name. I mean, it's no brainer. I mean, love the Apple guy on stage yesterday too. Just, you know, just kind of doing the victory dance. And this game's just getting started. The iPhone's still in elementary school. It's only since in 2007, since it's launched, really a game changer. Look at the significant change. The iPhone is a computer. It's got software that makes telephone calls. Mobile's changing. Guys, what is the mobile world like right now? Besides, totally on fire and growing. What's changing about mobile? Mobile's just become everywhere. It's what we expect. It's what we experience. And mobile's bigger than smartphones and tablets. I think we were talking maybe two years ago. Three years ago, we'd be talking about that. But what we're finding is, you know, there's this digital service for every point in our lives. It's that LED that I can interact with that's running mobile technology. It's the watch. It's the new desktop, right? That is in our TVs. It's in our cars. So all these things are effectively mobile technology. They're digital technology. And mobile's driving a lot of data too as well. It's not only getting data to the mobile phone. The amount of data we're hearing, certainly in the sensors and with mobile devices, you've got GPS's on the phones. It's enabling a whole lot of creativity. A whole lot of conversation. Apple was kind of pointing at that. 100 billion downloads on the app store. Just significant engagement, success, interaction. But the data coming in from the phones is significant. You got data from machines on the other side. We've heard from the keynotes, the data, the APIs, the Apple Swift. What does it all mean to the person in an enterprise saying, I got to transform my enterprise on this digital transformation? How did that all connect? Well, I think for certainly for us as consumers, there's just a huge opportunity to get a level of convenience that we've never gotten before. It makes it easier to find things we're interested in. It makes it easier for us to get goods and get them in the moment that we need them. But I think for enterprises, the opportunity is to really help their employees be substantially more effective at their jobs because they have this incredibly powerful computer in their pocket, and that can help them to make intelligent decisions at every given moment in the day. And if we could all just make smarter decisions in our day to day, I think we'd all just be better at our jobs and therefore more productive. And I think it's that further penetration you talked about the ubiquity of mobile in our consumer lives, our personal lives, now with the accessibility of all this data moving into the enterprise. So now we expect that same level of experience in our work. Pete, talk about the business at home. Before you get started, I want to ask you, talk about what is the Institute of Business Value? The in question. Because we're actually trying to understand, we're the business value. Well, you guys, I mean, you spit out thousand-end surveys like it's nothing, I'm really envious. Exactly. So we'll talk about what you guys do and how it's evolved. The IBV Institute for Business Value is the research arm inside of IBM where we do independent research, surveying global respondents, and come out with these reports. Reports that help us understand behaviors of our clients as well as the market and really address some of those biggest challenges, some of those unanswered questions. Okay, and the latest one you did on mobile, talk about that a little, set up the discussion. Well, one of those big unanswered questions is in the mobile space, what kind of ROI am I getting? You know, I think it's easy to acknowledge that mobile is prevalent everywhere. But what we also notice is that like in iceberg, few people really see the true value that mobile can bring. You know, you think of an iceberg 10% above the surface, 90% below the surface, that's how we feel about mobile. There's still a lot of uncaptured value. That's what really drove this study. So that's interesting because you know, you don't think about ROI and mobile, you just think I need a mobile, right? But you're saying, you're putting forth the premise that people aren't getting as much as they could out of their mobile investments. If they did more, they'd get more. Is that right? So that was really the impetus for the study. That's right. So what did you find? Well, we found at the broad strokes, the biggest impactful finding was the amount of return that's expected. So we can translate that into simple math. I'm a finance orientation in the background. So we talk about revenue increases, average revenue increases of 7% achievable plus average cost decreases of 6%. Cost decreases. Decreases. So you look at that combination of return and then simply divide that into whatever your mobile spend is, easy translation for ROI. And understanding the drivers of those elements really helps understand how you maximize it. So okay, you got the surveys going on. You're a survey machine. You get a lot of data. I wanna connect the dots on the trends and highlight two trends of Mobile World Congress that kind of highlight where we think mobile's going. We'll try to connect the dots from your survey and research. One is obviously in Barcelona, Mark Zuckerberg from Facebook went out there. They're doing the road show, virtual reality. They got Oculus Rift that's showcasing that. That's an immersive, rich, heavily compute intensive UI. Okay, so that's points to the user experience. 5G, connectivity everywhere. Could be over the top, powering IoT. So again, connectivity, experience, software, rich, media. Okay, is that where it's all going? How does this all connect? Because we still need more horsepower. We still need, but the screen's so small. What do you guys see in the data? Well, I think one of the things that we learned from the study was if you wanna unlock the value that was just described, you really need to take a holistic approach to your business. Why? Because you need to really think about each of the different touch points where people ultimately interact with different systems. It could be that you're looking at the different employee roles you have. It could be the different interface with your partners, with your customers, et cetera, and rethinking that. I think the trends that you mentioned are the opportunity to create new touch points. But what I think we saw is the people that took a holistic view of their business and really thought through each of the different angles where they could add value, those were the people that got the outsized returns. So that's sizzle then. That's just sizzle. The steak is underneath the water, if you will. So the action with the untapped value is understanding context. Is my mom getting that right? Or having contextual relevance in the moment? Well, mobile's a people problem. You need to think about, it's a human factors people problem. We need to think about how do we make people and users more productive? Whether we're acting as consumers, acting as employees, acting as partners. And really deeply understanding the needs of those roles and where you can add value. And that's really, I think what you look at these top folks that are really getting the most benefit from is they've done that analysis and they've really thought through the key moments of value and they've translated that into something that really permeates every different aspect of their business. The folks that didn't do that, the ones that maybe just did pockets of mobile or the ones that did the bare minimum to enable the mobile channel, they just didn't get the same level of return because ultimately they didn't really look at each of the different areas where they can improve people time. So you talked to a thousand people and you segmented them in some way, shape, or form. And so how did you determine the potential? You talked to the people who were actually doing it and I trust you guys know what you're doing. I'm just curious, how do you get that? Because ROI information sometimes can be fuzzy. They might not have it at their fingertips. Sometimes you got to sit down and really probe. How were you able to get that information and from whom? Well, it's a developed questionnaire that's been reviewed multiple times to really extract that kind of information and then finding the right people to interview for the survey. The interview surveyed the C-suite and directors, executives involved in their mobile initiatives. So that was one of the first qualifiers. So guys who had visibility on the financial impact. Visibility into the mobile initiatives, exactly right. All right. And so you focused on those two broad areas. Let me guess, you consolidated everything into those two broad areas, but the list of benefits must have been enormous, right? You had to categorize them into revenue generation or cost savings, right? Exactly. We have several drivers that fit into that revenue increase bucket. You think of new revenues. You think of increased revenues on your existing base. You think of expanding into new markets, creating new business models, all of those things that are very top line oriented, very growth oriented. In fact, that was one of the things that we noticed in the high performing group was that they tended to focus more on that top line for growth as opposed to just cost cutting as one of their main objectives. I mean, I think it's important to provide a rule of thumb from these kinds of studies. Yeah, of course. We get too specific. I think we'll lose people in trying to figure out how that maps to their business. I think the easier we can make it for people to just understand as they go into these efforts, where am I going to land at the end of it and how do I gauge my level of investment and involvement? That rule of thumb is just incredibly valuable for organizations at large. Basically, they don't want to bite off more than they can chew and get in this mess of twisted around and all these different objectives and metrics. And they don't want to get stuck in analysis paralysis, trying to figure out some complex matrix that they can't translate to what they experience as a business. Knock down some wins early. Agile model, kind of go down there. Yeah, absolutely. You said you found on average that people had five mobile initiatives this coming year and were spending on average 15 million per organization. Right. So these are distinct projects. They're all sort of interrelated all over the map. Can we talk about the knobs that I have to turn as an executive? One interesting point about that, as far as the number of projects in their mobile portfolio, five to six projects on average and 12 to 15 million annual spend on mobile. One thing that we thought was interesting coming from those numbers is that even with that robust pipeline, planned activity, they didn't seem to really understand the importance of the collaboration, reaching across lines of business to get that full coordination. And when you do that, you're able to really scale up all those projects and really drive that better. Yeah, so I mean, largely you learned that they were sort of independent initiatives, right? Led by an independent leader, funded by different businesses, perhaps. I think one stat on that aspect is 40% of them admit that they pursue it ad hoc. They just kind of one-off projects that aren't really coordinated. Which is understandable. They say, hey, I'm an opportunist. I'm a business leader. I'm going to go for it. I'll fund it. You guys have your own little CUBE session. You've got two researchers going at it, like, hey, how are we doing the methodology? We're like, hey, let's talk about the technology. There was a statistician that was going to be joining us. This is interesting. He's a math guy. But the point I want to get to is, okay, so how do you connect those independent initiatives? So obviously, there's a data layer. And what else? What are those other? Again, if you think about it like a people problem, a people process problem, there has to be somebody who has a good purview across the business overall to figure out the impact because all these different roles are connected. You know, if I work, let's say, in retailing, the person that does inventory management is connected to the buyer who's connected to the store associate who's on the floor. I can't just change one of these roles in isolation without impacting the other. For example, if I'm going to give a mobile application to a retail associate, well, that's a tremendous opportunity to collect information at the point of sale that helps a buyer to better pick their products. And if I can forecast based off of buyer trends, then I can stock my inventory management and do that more effectively. So someone has to take on the role of looking at the interrelationships between each of these different things and thinking about that as a way to truly optimize. Data is a huge component of that, obviously, right? That's a whole nother. We're going to have someone on the other side who's smart enough to actually understand the interrelationships from first, right? But this is the key point. The siloed isolation problem is the paralysis problem you get through because if you start to get micro on the deployment and how you're thinking about it, there's always going to be a fatal flaw. If you believe that, I mean, I do believe this integrated model works, but you have a fatal flaw if you don't go integrate it. Is that kind of where it dies? It's an initiative that you have to fund as well. You don't know what you don't know, right? So if you're not looking across other lines of business to see that full integration. Yeah, but this initiative that has to get funded, right? Somebody in the corner of the suite says to say, okay, I got to go to the CFO. I got to make a business case for actually integrating all these things. It doesn't just come for free, does it? We did discover that 62% of enterprises got payback of the project within the first year. Which is- For any mobile project, or are you talking about the integrations? With any mobile initiative. So I think the good news is, if you're worried about where to start, that's a great suffering statistic that says, what are you waiting for? It's self-funding. You might as well get started with one of those roles. And if you figure out how to link them to other roles, well, you're just going to get multiplicative benefit. Yeah, but the key is to your point, you don't have to go for the holy grail right out of the box. You can go knock down some value instantly. Absolutely. And then you have a little traction versus the big bang theory, getting it all on paper, political. That's right. That's right. One aspect you just mentioned about garnering support for the project. One of the findings that came out of the study was also those that were in the high-performing group had C-suite alignment. So in other words, they had the support of the C-suite. It was one of the most influential groups in driving mobile objectives. And it also helped guide the strategy. So it's really important to have that element. And I love the comment you made about multiplicative effects because those guys who have alignment are on the S-curve earlier and they're going to reap the returns faster, gain competitive advantage. That's right. Did you probe for that at all or are you starting to see that in the market space? Well, I think our segmentation sort of showed that that was the case. When we tried to make sure that we understood the attribute to the people who had outside success versus people that were getting minimal returns, those were some of the key attribution that we discovered as part of the study. That's just great stuff. We could do a whole cube day on this topic because it's very integrated with other aspects. But final point, guys, I want to get your comments on the show. Obviously, being on stage, mobiles in the front of everything, that is the endpoint, whether it's internet of things or human, humans are things too. What's your take on this vibe of the show? These are the people we just talked about with mobile. The blue mix integration, we saw spinning up stuff on with containers is really significant. That's a little kind of geeky point of what's going on with mobile to the data layers, the integrated value chain, the Institute of Value Management Consulting aspect of it. That's a lot there. What's the vibe of the show? Because it's a lot to get your arms around. Is there a vibe here that pulls it all together? Well, it is true that we're providing lots of options to our customers, but the fundamental message I think is really the same. I mean, we've taken a lot of steps to make it easier than ever for people to go and create applications. If you were able to listen to some of our main stage messages, the things that we've done are really about what we've been calling sort of radical simplification of end-to-end development because we want to make it substantially easier for people to build incredibly powerful business-impactful experiences, but make sure that they're leveraging their assets, leveraging the data that's locked in on-premise, leveraging algorithms built in for intelligence to their advantage, making sure they're making sense of all that data. We're making that process really easy end-to-end and I think that's going to make it even more accessible for many of those folks that want that kind of outsized return. Yeah, and it was a great keynote. I think making it easier reduces that denominator of the ROI equation, right? You're making it easier to invest. So I said that the key words were cheap computing storage, VMware, Open, Video, Apple, Developer, was kind of the summary of the first day. So you're saying easy. That's the key kind of vibe here. Trying to make it a little bit more easier for your customers to get up and running. Yeah, easier and accessible power. I think those are our two messages. You need power for IoT, that's for sure. And we're bringing the power here and remember on March 15th, Cube Madness starts. That's our March Madness Cube version where our guests get all nominated for their bracket and then they vote in and which becomes a hackathon basically. So if you're one, all the best brackets come together and Cube Madness on March 15th on SiliconANGLE.tv. War from interconnect after this short break.