 Live from Las Vegas, Nevada. Extracting the signal from the noise. It's theCUBE covering IBM Edge 2015, brought to you by IBM. Okay, welcome back everyone. We are here live in Las Vegas for theCUBE, our flagship program. We go out to the events and extract the signal and noise. We're at IBM Edge 2015. I'm John Furrier with my co-host, Stu Miniman, our next guest, Terry Burdening, VP of Power, our ecosystems and strategy at IBM. Welcome to theCUBE. Thank you. So ecosystem, power, the world is changing, the VARs, the landscapes, certainly the power ecosystems got less than two years old, growing like crazy. But the world of software is scaling massively. You got horizontally scaled systems, get scaled out, meets integrated systems, hyper scale, what's your world like these days? I mean, give us the update on the numbers. Who's, what's the numbers of the partners? And what's the dynamic now in the ecosystem? Because speed is key, time to value. What are some of the things going on? There's a couple of key trends, I would say. Right now we have over 1,400 ISPs for Linux on power, so we've really been growing phenomenally fast. But we're also doing a lot in the open source space, and with open source to your point, there's literally hundreds of thousands of packages. So part of what we've been doing is amidst all this growth and all these options, really honing in on what are our strengths. So our focus has been very much on big data and analytics solutions, cloud solutions, and really taking the great history we have with the systems of record solutions that have been built out on power on AIX and IBM I, and extending that with new Linux capabilities to systems of engagement. So we are looking for synergies that can really build on the strengths we have, build on our architectural strengths, and bring solutions to market that are made up of a combination of IBM software, ISV software, and open source software to provide leading edge capabilities for our clients with differentiated value. How is the open innovation message translating into value? There's a lot of great talk there, it works well. Is it converting? Are you seeing some specific examples, patterns of success? I can give you a couple of key examples of what we've been doing. One thing I would cite is that I was meeting with a lot of different partners about what we were doing in the open space. So it would be everything from Mellanox as a networking partner to MariaDB, which is providing open source MySQL capabilities in the market, Zen was providing PHP, and we started talking about what solution spaces were we all gravitating to. And all of them said in independent meetings, e-commerce mobile kind of solutions. And we said instead of IBM talking to each one individually and being this hub, why don't we get you all together and let's brainstorm on what we could do together. And so we got together over last summer, we introduced by fourth quarter on what we called the turbo lamp stack where we showed if you bring all these capabilities together, if you work together to optimize, what could you really achieve? And MariaDB, for example, showed that they could have 2.2X performance advantage versus the traditional X86 environment they've been working in. But we kept pushing at that and saying, well it's great to have the lamp stack, but what are the solutions? And so we reached out to another partner in the e-commerce space, Magento. Magento is basically part of eBay. And we said, what if we could work with you to really have breakthrough capabilities but with enterprise class servers? And we've had great results with them and we've shown the value in the terms that people care about for e-commerce of bringing this kind of capability together in those partnership modes. So Terry, IBM's been involved in open source for a long time and we all think back to kind of the billion dollars in Linux, really set the tone there. We did an event recently with the MIT Sloan School and the Institute for the Digital Economy and talked about how it's tough to make money in open source. Usually you want to contribute, it obviously helps with the innovation but there usually needs to be some kernel of how you differentiate yourself or how you make money. Can you speak to, how does IBM help its partner ecosystem? Figure out what business models to do and how to actually monetize what they're doing in open source. I think that's actually a really important question and that's one of the things we've talked to about many of the, with many of the partners about. So, you know, born on the cloud in open source was great until it became time to make money. Not just grow fast but actually make money in the process. And what we've heard with those partners I referenced in others is a couple different things. They want enterprise class credibility because it positions them more to make money. They want access to enterprise clients as part of that, right? Because they want to have really, you know, the presence in the public cloud and differentiated capability with us but also more hybrid cloud kind of solutions or even private where they can shift to a private cloud and really increase their chances to drive upside revenue. And they really want to do joint go to market with us where we're introducing them to our channel partners, you know, our distributors, et cetera and as well as our direct sellers to go to market because we're really seeing when you bring those pieces together, everybody benefits from it. And so that is really a core element of what we've been doing is kind of working on that go to market and doing road shows, et cetera. And everybody's happier then because they're working together and they all see the upside revenue they can drive to your point. Yeah, I'm wondering if we can unpack it just a little more because, you know, IBM Global Service has really set the stage for a lot of that, you know, open source adoption because you've got service engagement that was, some would say, that helped IBM grow the services today. Software is really taking a larger share of market overall and it's not necessarily about having a service engagement every time, but helping build it into the software and help build that out. Do you see that shift? How's IBM, you know, adjusting kind of the services versus, you know, just making software that can be monetized? I really think it's on all levels, right? It's, you know, what can we do to help monetize more for the open source providers? What can we do on the software side and what can we do with the services? It's across the board and I know, again, talking to the partners that kind of were born open source and they're looking for how to monetize. It's everything from, is it service and support? Which is kind of starting to be a me too game. Everybody's driving to service and support and enterprise service and support. That's low hanging fruit. Yeah, but it's also, you know, how do they take the open source base but then extend it with differentiated capabilities? That again, they can quantify and show the clients why pick what they've got versus just picking it up out of the open source community and working with it. And I think you're going to see more and more of that in the industry. I know, I meet with a lot of partners. I'm always on the road talking to partners and this trend is absolutely in every discussion I have about how they want to drive to, you know, upside revenue and the monetization. So SAP just had their show, Sapphire now. What's new with SAP? You guys have some new updates there? Some news, yeah. Yeah, share with us. So at Sapphire last week, we announced that we are going to be delivering to market SAP HANA on power, which we think is a great step forward. We've had a really long partnership with SAP and I think this is just the next step in that evolution of the strong relationship and the teams did a great job jointly. We had to work together to bring it to market. We will continue, by the way, with our SAP environments for AIX and IVMI, no question and some great capabilities in that space, but HANA is really, you know, SAP has declared their flagship and so it was important for us to participate in that. And I do think that we were focused again on why power in that space, right? And looking at things like providing SAP HANA solutions across our whole server product line, giving the client's choice flexibility in terms of how they want to deploy, scale up or scale out clearly as an example. You know, clearly the resilience we're known for, but we're looking for the other characteristics, the performance benefits that they'll get with power and we'll continue to evolve that and build on it, but we're very excited about it. That's the next partnership. Great partnership. They're the Ferrari of software in that use case. They need some power, so to speak. They need power, power. Any other news with SAP, any kind of other data points you can share with us about the deal? Well, that, I mean, the core announcement was very good news, big news for us. I mean, you're going to be pumping it up and building a go-to-market behind it. Oh yeah, we've been working on that with them for a while. So in parallel, we were working with the technical teams, obviously, to bring this to market with the general availability, but we've been working on go-to-market. We've been doing enablement for the sales teams and the partners for a while. We had a ramp-up program with them, so we had some really great partners working with us hand-in-hand to make sure the functionality was everything we expected and the benefit was there. And we actually have one of our clients that was part of that ramp-up program, NTTData, speaking here this week about their experiences and they basically said moving from what they had been doing with SAP HANA on x86 to power, queries were going from hours to minutes and that's the kind of thing you have to show and deliver on in the industry. Talk about the ecosystem changes. Obviously, IBM's strategy, radical shift with the whole integration of storage, big data we heard, smarter cities. You're seeing a lot more integration touchpoints with storage in other engineered like systems, whether it's converged to open. How does that change the ecosystem strategy? Can you share some anecdotal feedback, learnings magnified? Can you just give us some color on that? I mean, I would say whenever you do a solution, you have to think of the integrated stack that goes along with it. We don't look at pieces in isolation anymore. We always look at what's the server elements, the storage elements, the networking elements, the middleware elements, you know, right up to the solution and application layer and the deployment, right? It's a cloud deployment, public, private, hybrid. And so you got to look at all the pieces in parallel and the evolution of all the pieces in parallel. And I think if you look at some of the key announcements we've been making around solutions, be it for things like Hadoop-based solutions on the platform, right? We've got storage, componentry, considerations, networking. We had Melanox working hand in hand again with us on the networking side. We, you know, we had our servers and what did we need to do to optimize the environment and, you know, right up through to the stack layer with our partners from IBM Software, the Big Insights team. And we're continuously looking at that and how it's changing, right? With Spark, for example, emerging in that space, what are all the considerations from an optimized stack perspective to have the best Spark characteristics as we bring it to market? So it's always core to everything we're doing and you'll hear a lot of times with solutions, we'll talk about solution additions, right? We announced them for SAP HANA, we've had them for other things and that's us putting those pieces together and saying, you know, here are the reference configurations, easy installs, cookbooks for how to put the pieces together. So it really is looking across that whole stack and how to optimize it and future designs, how to learn from that to continue to evolve the characteristics. So Terry, IBM's always done a great job at, you know, building out these, you know, large ISV ecosystems, I remember when, you know, Pure Systems was announced, you know, hundreds of partners are already ready day one. There's a really land grab out there for the developer community and new modern applications. Cloud Foundry Summit's going on this week, that's kind of the new middleware, IBM's there with your group there. Containers, you know, talks about separating the application management from your infrastructure management. How does power fit into this kind of whole, you know, new evolving model for developers in the ISV? You know, it's again core to everything we're doing. It's what the industry is moving towards. And so we made a series of announcements, for example, in February at Interconnect about Docker, about what we were doing in general with some new open source capabilities, building on OpenStack, the whole Cloud Foundry discussion. You know, you can't be in the solution business today and not be part of all this or you aren't paying attention to the solution business as far as I'm concerned, right? So even if you look at something like the open data platform announcements that were made in about that same timeframe, we were very much working that, you know, some of the examples of that capability were based on power test cases, client implementations that we had done. So we are very active in these, sometimes you don't see our name, but if it's got to do with the solution, then it's tied to those core solutions. The solutions are changing. It's a Lego block, it's integration. It has to be. These new dimensions or new factors to buying and consuming. Exactly. Cloud-based mobile. Right. And the great thing, by the way, is that the fact that we are embracing the open standards and the open communities, et cetera, it gives clients choice of what do you want to put together? Or you have the open APIs, you understand the basic constructs, and your job is to build the best version or implementation of that as possible. We just had Stephanie on. She's like, we do Linux like it's never been done before. I love that. But it's the mojo of saying, hey, it's different, but we're going to leverage what people have. And then build that next generation. Exactly. That's exactly what you need to do. I think it's a huge opportunity for the ecosystem. I think if I'm a partner or I was a bar or reseller or now integration, there's so much more you could do to increase profits on the delivery side of it. That's, I think, exciting. Yeah. And again, to how we started this, you got to do it with focus. You don't want to be all things to all people in scattershot. You got to be very clear about where are your strengths? Where can you make a difference? How do you build out the right ecosystem to target that market? Hopefully you guys had Ken King and the whole open power ecosystem. We love that story. It's a great story, because I've been talking more about the software ecosystem and what we're building on, but you got all those pieces coming together in ways the industry's never seen before. We interviewed Doug Baylog two years ago. I think it was at one of the events. It wasn't Edge, it was Pulse, I think it was called Pulse. Yeah. And they just launched, what might have been the impact? They just launched Open Power. And he's bringing this bravado. But he didn't know. So what do you think is going to happen in the normal CUBE interview? And then I interviewed him a year later and what an amazing launch, because you put it out there. You put it out there, see what happens. But the reaction shows you the industry was hungry for this, right? I mean, to have this kind of collaborative innovation that goes along with that, that's what I think excites people to be able to get together. There's a whole new channel of opportunity that you guys have, it's amazing. And they're building into your ecosystem, it's self-reinforcing. It's a beautiful thing, yes. It's a beautiful thing. Terry Verney, we are here, live inside the CUBE, Vice President of Power, ecosystem strategy for IBM, got a great job, super excited. This is theCUBE, we're right back after this short break.