 Live from Las Vegas, Nevada, extracting the signal from the noise. It's theCUBE covering IBM Edge 2015, brought to you by IBM. Welcome back to Las Vegas, everybody. I'm Dave Vellante with Stu Miniman. This is IBM Edge, this is theCUBE. We're here with Dr. Steven Pratt, he's the CTO of Centerpoint Energy, a Houston-based company. Steve, welcome to theCUBE. Well thank you very much. So tell us about Centerpoint. Well, Centerpoint's a 135-year-old energy delivery company. We deliver natural gas to about 3.5 million customers. We deliver electricity to 2.3 million customers in the city of Houston. We operate in six states. We are one of the leading innovators in terms of smart grid as well as smart meters. We have implementations of both advanced distribution management systems and advanced metering systems that actually drive benefits to our customers both on the electric and gas side. Okay, so you generate the power as well or you're primarily just distributing? We are a wires and pipe company. We do neither generation nor do we do retail for electric. We do do retail to our gas customers. Okay, so you don't have the typical giant capital expense of a utility company. You're really getting the electricity, the energy source to the consumer, not the retail consumer, but the... That's correct. We like to think of ourselves as an infrastructure company that moves energy from point A to point B. We, in the state of Texas, we went through deregulation and we looked at keeping our generation, which we did have at one point in time. We looked at maintaining our retail, which we did have at one point in time, but decided that we'd be in the business that we believe we do best. And so we have become a wires and pipe company in terms of moving energy from point A to point B. You get deregulation, creates competition, opens the market for folks like yourselves to change their business model and compete with others. You've got oil prices going up, down, and then sort of steadying. You've got the whole fracking thing. How does all that affect you from a technology infrastructure standpoint? Oil prices certainly have an impact on any company that delivers energy in any way, shape, or form. Obviously, we have to purchase what it is that gets generated and that runs through our pipes and our wires, and so ultimately, that does have an impact. But for a public utility, you're somewhat shielded from some of that. It's your public utility commissions that typically make decisions on your return on your investments. So I would say that we're riding that storm and we're probably better off than most companies in that case, but from an infrastructure perspective and what we have to have in place is methods to maintain our infrastructure in the most highly resilient way possible. That means that we have to have devices in the field that can indicate the state of our grid at any point in time. We need devices in the field that can indicate whether our customers are having power problems or whether an outage or a potential outage occurs. And so we have to build infrastructure that pulls in data from intelligent devices, analyzes the data from those intelligent devices, and then makes decisions or suggests decisions on how to best deal with any type of event that curves within our systems. Yeah, so it's interesting. You hear lots of discussion about the internet of things and sensors and everything. You're a 100-plus-year-old company that has had so many endpoints. How's technology really transforming the way you run your business? So for 120 of those 135 years, we pretty much did business the same way. When meters and advanced meters or smart meters and intelligent grid devices came into play, we looked at that very carefully and determined that would be our innovation moving forward. That would be the additional benefit that we can provide to our customers. And we were already generating a great deal of data about our customers, but the ability to ingest that data, the ability to analyze that data in near real-time allows us to make much better decisions much faster. And we use a great deal of technology to do that. IBM Power Systems, for example, are a big part of what we do. We also use the Streams product, which serves as our real-time evaluation for our analytics interrogation. So we are a real-time company now with respect to the technologies we deploy, and we can make better decisions faster as a result. So talk about the backend, right? Internet of Things, you guys are living it. You mentioned Power, you're a Z-Systems user as well. Talk about your data center infrastructure from a server and maybe even storage standpoint. What's it look like? Absolutely. We have a lot of technology. Our technology matrix contains 1,100 different pieces of technology, much of that technology is IBM technology. I'm going to start with our mainframe. Our electric company distribution system is still maintained on our mainframe. It works very, very well for us. At this point in time, we do not intend to move away from the mainframe. However, for our distributed systems and for analytics and for data ingestion, we use power systems. We have over 120 power systems in place today. Those power systems provide the horsepower that we need to analyze data in real-time and near real-time. All of that needs to be managed. We use the IBM Enterprise Systems Management Tools, a variety of them, to monitor these systems, to monitor our intelligent devices. All that data is brought in. We use a correlation engine to examine that data, and then ultimately we make decisions about events that are occurring in our system. So our data center is very systematic in terms of we tie our servers to our IBM storage, for example, that's another big play or big part of what we have to do. We have to use storage that is very responsive. But I would say of all the technology we have and all of the IBM technologies we have deployed, the most important aspect is the resiliency aspect. When you're dealing in real-time where you're dealing with distribution of electricity to your customers, you have to have resilient systems. You have to have a system and the technologies in place that allow you to be as highly available as you possibly can. And our power systems and our storage devices and our systems management software allow us to link those things together in a very efficient way and provide for the highest level of availability as we run these analytical scenarios. So as a CTO, you're obviously architecting for availability. It sounds like that's the lead piece. There's a lot of other pressures. And you're using the mainframe Z system for the, you said the distribution system, so that's the high availability workhorse. And then you're collecting data from the endpoints, bringing that in and doing analytics. That's really the primary use case for the power system, is that correct? That's correct. Our CIS system is what's based on our mainframe for our electric customers. But we use our power systems to ingest data in near real time from our intelligent meters and also from our intelligent grid devices. They come in through those power systems. There's an aggregation of data, but ultimately that data does reside back in our mainframe and gives us more information about our electric customers as well. We use all of these systems in a very integrated way. They each serve their, the specific purpose relative to us being a smart grid company. And so we think we've got our technology distributed in such a way and utilized in such a way that we get maximum benefit based on the platform that we're on. So you talked a lot about resiliency. I'm wondering if you can address how security has changed now that you're letting automation and all this technology help with how you service your clients? Well, the interesting thing about security is it's the thing we're not really allowed to talk about. Certainly everybody is aware of the security opportunities no matter what business you're in, no matter what technology you have in place to deal with that. Centerpoint Energy, because we do have critical infrastructure, we do have electric infrastructure and gas infrastructure, actually works with a variety of government entities in terms of ensuring that we are well positioned to ensure we have the highest level of deterrent, if you will, relative to securing our systems, particularly given that smart devices are on a network, so they are subjected to any type of network vulnerability that may exist. We have put a lot of defenses in place today at Centerpoint Energy. Obviously your goal around security is really to detect, to contain and ultimately resolve. I don't think any company believes they're going to be in a position to deter any potential threat, but we think we have the right security capabilities in place across all our technologies, including our IBM technologies, to ensure that we're in the best position we can possibly be in with respect to ensuring that we're securing our data, but also ensuring that our customers' data is protected as well. And what about apps layers? So are you, we're writing apps, or using commercial off the shelf software on top of Linux? Is it Unix? You maybe talk about that. So we use primarily AIX or Unix on our power systems, obviously. On our Z system, we run basically a custom built CICS application for our CIS system, for our electric systems. We do use an ERP system for the majority of our company's business today. It's an SAP system. On the mainframe. Well no, the mainframe, that's on power. We do use DB2 databases almost predominantly to support all of our applications today. We do use IBM system management software, Tivoli, for both our monitoring and correlation of events. So our applications, we write applications across the board. We do have Java applications that run under Linux. We have a variety of Microsoft based applications. We run a lot of off the shelf software. We do a lot of customization of our software. Because we are in a deregulated market, we're required to have a market system. That market system does run on IBM power systems as well. So our applications are, I guess, as the most large organizations are a variety of applications. Yeah, I'm curious, you look at the kind of the personalization trend that's been going on. How do things like Nest, mobile apps, users using the cloud affect your business? So on a cloud, from a cloud perspective, public utilities are typically slow to adopt. Particularly cloud, but in the state of Texas, and I have to assume it's like this for other utilities, we also have a way that we have to look for recovery of capital that's very, very different. So investments in the cloud have to be very large scale when we go to the cloud. And they have to be something that allows us to get some form of return on investment. So we don't have a large presence in the cloud today. From a mobile perspective, we look more at our workforce around mobile apps than we do our customers today. We provide mobile apps for our customers. These are generally small apps. They're generally customized apps today. We don't have a large portfolio of mobile apps. So I would say we're in our infancy relative to mobility. We certainly know that we will be there. We are also in our infancy with respect to the cloud. It'll have to be the right workload and the right catalyst to move us in the cloud. We fully believe that ultimately we will be in the cloud in a much bigger way than we are today. IBM certainly has a good cloud and we've actually developed a strategy with IBM around cloud and ultimately we will grow that cloud presence. So last question, we're running out of time, Steve. But I'm curious as a CTO, what's exciting you these days? What are you working on? What's the future hold? So the most exciting thing for me is that we have an entire organization that's gotten behind data as an asset for the first time in our company's history. And we get a lot of data. We do 221 million meter reads a day, which creates about a terabyte of data every day that we're required to keep for three years. We can do nothing with that data or we can mine that data and use what we find from mining that data to the benefit of our customers. That is very exciting to me today. Great, Dr. Steven Pratt, data-driven CTO, utility company consistent, predictable, cash flow business, reliable availability. Thanks very much for coming to theCUBE. It was really a pleasure having you. Well thank you, it's been my pleasure. All right, keep it right there, everybody. We'll be back with our next guest. This is theCUBE, we're live from Las Vegas. IBM Edge 2015, we'll be right back.