 from San Francisco. It's theCUBE, covering Red Hat Summit 2018. Brought to you by Red Hat. Okay, welcome back everyone. We're here live in San Francisco for Red Hat Summit 2018. I'm John Furrier, my co-host, John Troyer. Next guest is Cube alumni. Been on so many times, I can't remember. You got to, I think you're a VIP Cube alumni. Doug Baylog, general manager, IBM storage client success and IBM's partners, executive leading the Red Hat relationship. Welcome back to theCUBE. Great to see you. Always great to be honored again. It's a new category you just invented. A VIP alumni is still something. On the cube.net site, we actually have badges for Cube VIP. Fantastic. VIP. Great to see you. Again, we have a little history. Your role at IBM's, you've been there for a lot of time. You've seen the history. Power has been in your wheelhouse. You built that from scratch. An open community with the power systems at IBM. But you launched Open Power. Right. An open consortium. Very much open. And you know that. There's very successful congratulations on that. Thank you. Now your role with Red Hat, the lead executive, the guy to call. Is there any problems or anything? Opportunities? Right. What's going on? Give us the update. Yeah, so I think it was mentioned by Matt on stage today where we're actually celebrating 20 years of partnering together with Red Hat. And I think a lot of folks take pause at that and not realizing how far back this relationship goes. I mean, I was hate to say I was there in 1998 when we struck this agreement. They get that time, a lot of folks inside IBM were scratching their heads saying, who's Red Hat and what is Linux and why are we doing this? And you know, at the end of the day, we have had a longstanding belief in open collaboration, drives innovation and drives value to clients. And that was the fundamental reason we jumped in when it was just an operating system discussion back in the early 2000s. And we, you know, we brought that across at that time, our Intel server base, then our mainframe and then in 2013 our power platform. We brought our software along as well back then too, running on that operating system. Then it became a virtualization discussion and we bought Rev onto the platforms. Our software supported that. And now here with some exciting announcements today around the partnership around cloud with a common container strategy, which I think for enterprise clients will help build a larger ecosystem, give clients choice of how they want to bring that value to clients. So it's been a long, deep relationship and one that I think the two companies are more aligned than not in many ways. And you guys are humble, I'll say it. You guys were a catalyst moment. Linux, the Linux coming together at that time became an industry standard literally overnight because the industry rallied around it. You guys supported it with a big contribution and since then, but that was back in the day. You know, that was, you know, when it was very early tier two citizen in the world, now open source is tier one. It's powering everything you see. Open source software and storage and networking, software defined data center, now cloud scale. This is a big deal. The big deal for the world. Now, the cloud strategy is interesting to me. So you got the Red Hat powering a lot of the enterprise. Hybrid cloud is the number one thing on the agenda. Multi-cloud is kind of being discussed, but that's the end in mind. Hybrid cloud is the number one work area which is essentially cloudifying, creating cloud operations for the enterprise. How has this partnership with Red Hat impact IBM's customers and what's in it for the Red Hat customers? Yeah, I think is, and I know you just had Arvin on here a moment ago. It was literally just about six months ago that Arvin and I and Paul Cormier and Jim Whitehurst sat down and said, you know what, I think the next big thing for us to partner around is containers, right? There is so much advantage for speed of software deployment, this hybrid cloud structure you talked about, then the fact that, listen, I think we're much more mature in the industry talking about cloud. There were moments a year or two ago where the answer was everything's going on the public cloud, you know, on-prem's dead. I think it's a much more mature conversation now in terms of the role of hybrid, which means clients are still going to have plenty of their data, especially if they're a regulated industry, that data's going to stay on-prem but that still doesn't mean there are parts of their infrastructure, parts of their applications that they're going to want to run in a public cloud like the IBM cloud, so that ability to have a common container approach, a common container management structure like IBM Cloud Private with OpenShift as the partner, I think it brings tremendous freedom of choice to clients of where they run what with a common development platform. It's interesting that definition's changing, we're always squinting through the noise but the bottom line is if everything's cloudified, if you will, using that word, on-prem and public cloud doesn't really make a difference where you're located because it's cloud operations and Wikibon had the True Private Cloud Report which basically stated that True Private Cloud is essentially on-premise activity just operating in a cloud framework, meaning same code bases, more operational dashboards, cloud operations not traditional IT. So I think there is the distinction, so it's still on-prem. Still on-prem. But now you got the edge of the network as well, software-based too, so you got IoT Edge, public cloud, hybrid, all coming together. You know, we used to, when the world was just on-prem for the most part, we used to talk about different architectures being fit for purpose, what's the right workload to run, what kind of applications. I was just up with a large financial institution in your neck of the woods on Friday, and we were having this fit-for-purpose conversation around the cloud, based on what kind of workload it is, how sensitive is the data, is it redacted of URMI, names and so securing numbers, right? All that stuff that's important. Where should that cloud workload run? What cloud should it run in or should it run on-prem or across both? So it was a lot of what's old is always new, but of course it keeps evolving here now to this world of multi-cloud and hybrid cloud, as you said. What's going on with customers at IBM? Tell us a little bit what's happening in your world. I'll see the industry's replatforming eyes, the entire business. It's not just companies, it's an entire infrastructure's changing. Cloud, what do you call it? Cloud infrastructure, data infrastructure, AI, you can do instead, you've seen the power stuff, being successful. It's a global re-architecture. That's right. This is not about one company. No, no. This is a complete standard in the world. Everybody's transforming. And I don't think there's ever an end to transformation. I think transformation is a train ride you decide to get on and you better get on and you're going to stay on it once you get on. Right now there's milestones along the way that demonstrate progress, but there's no resting anymore in terms of being comfortable in today's world. So transformation is going on forever. In the systems business, we're constantly transforming, right? We brought out a new mainframe last year. We call it the Z14. And now recently, you know, kind of some of our little skinny Zs, the ZR1s, right? Which are really designed for the modern data center because they fit in a standard, an industry standard racks. So we're bringing that robust security to not only our traditional Z clients, but to brand new Z clients running Linux, by the way, right? Yeah, yeah, Arvin was, Arvin nailed it in his description and I think this is true. You got TCPIP, HTTP. These are seminal moments and now you got this glue layer with containers and say Kubernetes. This is going to change how software is being built and software being run and how businesses will be running. So that's an industry-wide dynamic shift over at the infrastructure level, instrumentation and all the software behind it. Okay, that's happening. We're agreeing with that and totally agree with that. Now the impact of the customer, what do they have to do? Because they have to now adapt to this new world, which means they got to put the legacy and plugging into the legacy. They have to have microservices. So what is that software defined infrastructure look like for the customer? You've seen the system side through storage. What does software defined mean in this new architecture? Yeah, it's certainly, part of the objective of ICP, IBM Cloud Private, was to create that on-prem cloud experience because again, so many clients were looking for not just having their traditional IT, which they're going to continue to have but continue to modernize, but also move to a new environment that was much more self-service. All the things and the benefits of the public cloud, was still being careful around their data in many ways and their core applications. So they're transforming and modernizing from legacy IT to on-prem IT and then branching out with the Fit for Purpose discussion to the multi-cloud, to the hybrid cloud world. I love the Fit for Purpose. You can fit that in so many parts of the stack, right? We, I think open source, one of its characteristics is it develops in public. And 20 years ago, the question was, not is it Fit for Purpose, but when is Linux going to be ready? Is it going to be ready? Is it going to be ready? Well, I think that answer is pretty clear now. And I think the same thing has been going through with containers and with Kubernetes, right? On theCUBE, you're tracking Kubernetes, the growth of Kubernetes. Is this a real moment where IBM says, okay, now Kubernetes and OpenShift is now ready for the enterprise? Absolutely, absolutely. If I think about kind of big moments on IT that provided ubiquitous access to developers, right? You had, we talked about Linux as an operating environment. Once all the platforms, the different architecture were in Linux, the ability for application portability while still bringing out the value of the platform became very much true. Java from an application programming model was another one, right? If you wrote in Java, you had the ability then to move that Java workload around without recompilation in many cases to different architectures, getting the value out of where you chose. Containers are the next one, right? So now we're containerizing workload. And again, you have sort of freedom of choice of where you run it. And if you run it in this cloud or that cloud or this system or that system, you get different values out of it. And we're not just containerizing microservices, right? Now we're talking about containerizing, you know, WebSphere and databases and message queuing and kind of that robust runtime that somebody in the audience joke, gosh, I haven't seen those queues in a long time, right? Not that they haven't been there, they've always been there. But again, this is back to, how do you take what you have from a legacy IT and modernize it for this cloud era, much more than cloud washing? This is really, you know, transforming in the eyes of you. It preserves the investment. I mean, the bottom line, if I'm a CIO or I'm an executive looking at this market, I say, okay, I got a purchase decision I've made in the past and I have an install base of stuff. And my choice was used to be, okay, I got to replace that, hire new people, get move everything over. To now, your approach is a little bit different. Great, just containerize it. And then when you're ready, you deal with it on its life cycle. That's right. So you don't really have, it's an ROI thing and it's also preservation of pre-existing conditions. Now the other big, of course, client transformation going on is there's not a single client on the planet who's not trying to figure out artificial intelligence and what it means to their business to bring more insights around their client set into their workflows. And so that's why, as you know, in addition to Watson and all the work we do around Watson, of course, in our cloud, we've gone down to the system level with our power platform and really optimized Power 9 with flash storage attached to it as the best combination of a platform for this AI era. In fact, I was sharing just before we went live here, right? It's actually a big announce day for our systems business too. We're announcing new models of our AI platform, what we call the AC922. Now with six GPUs, with our partnership with NVIDIA, we've got new Linux systems, kind of the fall on with Power 9 that, you know, I started back, they're much better by the way, right? That I started back in 2013. So, you know, here we are at the Linux summit. We've got a common cloud partnership being announced. And at the same time we're announcing all the way down to the metal systems and ships that are optimized to run the Linux and open source platforms. And the thing that I like about this environment is the level of granularity is getting down to the point where you can have your applications or down to the level of service to a service level and manage it on that base and Power AI would be a great example of what could happen. It actually connects it all together, right? I mean, Power AI, which again, new content there, we've just announced Power AI on Power 9 and on Red Hat for the first time. You know, back to new news here at the summit. And in fact, it'll be containerized later this year. So now you've got Power AI in a container on IBM Cloud Private, running an open shift optimized for Power 9 starts to make your brain hurt a little bit, right? But I mean, that's sort of the level of the thoughtfulness of our strategy and how all the pieces look together from the software and the applications down to the systems in the chip. You guys do a good job keeping it in the open too. I really liked that how that went with Power, certainly great, great stuff. Power AI for the folks watching, check it out, it's from IBM. Interesting product, I think it's got a lot of capability. Your perspective as an industry participant, you know, you've seen many waves. Right, right. What's this wave like in your opinion? You know, there's so much going on with this new infrastructure. Yeah, right. How do you talk about it when someone says, hey Doug, what's going on with all this stuff? You got blockchain over here, you got this going on over there? Yeah, I think the, at least from a systems perspective, the way I think about it, and myself and my peers think about it is, we've gone through so many generations where it was more manufacturing process driven innovation. You know, how do you pack more on a chip? How do you pack more on a chip? How do you pack more on a chip? And it was kind of all about that. We're now in an era where homogeneality is no longer going to cut it, right? You're going to really need, you know, a number of GPUs, a number of processors, different kind of architectures to fit the kind of workload that's coming so fast at us these days. You really don't have time to step back and say, no, no, let me replumb my whole data center with that next one chip, right? It's going to be a diversity of infrastructure. And so that- It's hard to provision, you need it available. Immediately. So this wave we're in really is about bringing that diversity of the heterogeneity back to the data center and bringing that value, though, back in a simplified deployment way because heterogeneity means complexity in some ways. And that's where the layering of, you know, software packages like PowerAI, like software defined storage, like ICP and OpenShift with our partnership with Red Hat kind of help bring that diversity and bring it back to a common level of application development. That's kind of the end goal. Common application development, the platform brings out the value, the app doesn't have to worry about it, but you've got that diversity of choice underneath. Great, Doug, great stuff, great to have you on theCUBE. Just to end this segment, just briefly summarize for some people watching, what's this relationship with Red Hat all about? What's the, obviously you have history, but what's the value? If you just talk about it right now, what's the impact to the customer watching of the relationship that's announced to you with the private cloud initiative with Red Hat? Yeah, I think if we summarize the relationship without getting into the technology, it really is about bringing innovation to enterprise clients. At the end of the day, that's what Red Hat's focused on, that's what we're focused on, and that's what we're focused on together. They have great minds in the industry. We have great minds in the industry. The power of those minds coming together to create some of the innovation that we've just talked about here in this segment, I mean, it's mind-blowing for what it means to enterprise clients to help them propel themselves forward and transform. That's what it means. These are the kind of partnerships we're going to see now that people are rallying behind Kubernetes and containers and this new software-defined infrastructure that's going on, stick more of it, right? We see it more? Absolutely, it's software-defined is the name of the game these days, right? Not that there isn't value in the systems, by the way. Still plenty of them. Systems are under the hood, they're under the hood. They're under the hood, and they're differentiated for sure. They have infrastructure as code, you still need service to run this stuff on, so. It does matter, it does matter a lot. Great to see you. Good to see you as always, John. John, good to see you. Absolutely. Hugh, bringing all the action here, here in San Francisco, live coverage on John Furrier, John Troyer, day one, we'll be right back with more after this short break.