 Okay, we're back. This is Dave Vellante of Wikibon.org, and we're live here at IBM's IOD conference. Now, one of the areas that we've been covering and tracking at Wikibon for quite some time now is this notion of converged infrastructure. And IBM is a leader in that business, a little late to the whole converged infrastructure marketing party. I mean, IBM certainly has had different forms of converged infrastructure, but as far as a specific solution that's specifically designed to compete in that space, IBM was one of the latest entrants into that marketplace, but it came in with guns of blazing with one of the strongest offerings. In particular, IBM's major differentiator is it brings application knowledge from its customer base and its services business and embeds that knowledge in the form of templates and patterns into the systems. In addition, IBM designed these systems from the ground up. I mean, essentially bringing in new networking capability through an acquisition and through some organic capabilities, as well as its systems expertise and then bringing in the storage side for an integrated package competing with the likes of VCE and HP and NetApp and of course Dell. So we're here to talk about that with Nancy Pearson, who's the Vice President of Expert Integrated Systems Marketing. Nancy, welcome to theCUBE. Thank you very much. Good to have you. Now you heard my little monologue there, a little late to the market. You know, you're probably going to disagree with me. So jump right in on that. I was going to jump in on that one. Were you not late? We weren't exactly late to the market on integrated systems because the mainframe is basically an integrated system. So I got you there. Okay. So that's fair, mainframe integrated systems, but the pure systems, one of the things that Mills talked about and generally your marketing talks about is how you guys designed this from the ground up. Absolutely. Yeah. So you didn't redesign Z? No, no, no. And I mean, Z is an integrated system, but it's not what we're talking about as it relates to pure systems. But there's new class of systems that respond by the likes of Exadata and VCE and other of your competitors that you guys came in now. But you didn't, to my point, you didn't just follow in, so, okay, we're here too. We're going to protect the base. Right. You came in very aggressively. Well, we did. And frankly, we're really very focused on what problem that we're trying to solve with pure systems and our new breed of expert integrated systems. So we're really about helping our clients to be able to reduce the complexity and also change the economics of IT. So we know that our client base today spends around 68 to 70% of their IT budget on just keeping the lights on of their current infrastructure. And that's really untenable over time. So our design for pure data systems was that we were going to be bringing a family of systems to market that are very workload focused and that are really designed and factory integrated with built-in expertise, integration by design, and then also a simplified experience over the life cycle of the technology. So we take a different approach than our competitors. And again, there are converged systems, engineered systems out in the marketplace. But our approach is really very different. And it's an open standards-based set of systems, unlike some of our competitors who have only proprietary systems and they only- Like Oracle, for example. Like Oracle, for example. The red stack. I know you guys don't like to name names, but I'll name names for you. So Oracle is totally private. There's others that are open though. But they're more reference architectures, right? Right, and some of them aren't really integrated by design. They're not integrated in the factory. They're put together either by business partners or services organizations. Or joint ventures. Or joint ventures. So where would you put VCE in the hall? Exactly. They would debate that. Wouldn't they say, oh, we're integrated by design too? Right, but they're not. One of the things that we talk about is our systems are up and running in four hours. Very hard to do that with our competitors' approaches. I don't think any of them could actually claim that. But it's actually more than that. So we announced in April our Pure Flex system, which is our infrastructure system. And then Pure Application System, which is an application platform. Both of them are infrastructure as a service, platform as a service. And then very excited to have announced in Singapore and also here at this event, our Pure Data System. And in Boston. I was there in Boston. And in Boston. Actually, in many, many locations. In Japan, our Pure Data System. And that system comes in three models. Our Pure Data for Transactions. Pure Data for Analytics, which is based on Natesa technology. And then Pure Data for Operational Analytics. So, and we've had very, very positive response in the marketplace. Both from clients, from analysts. People really are welcoming us into this space here because they want choice and flexibility. Yeah, so it's, like I said, simplicity. So this market's huge. I think we were one of the first to quantify it. And we sort of did have a back of the napkin and then dug into it a little bit more. We pegged the TAM at 400 billion for this class of system. Now, we included in that reference architectures. But it's enormous. And IBM has a lot to hold onto there. I mean, you guys are the leader in systems. And so, a lot at stake. Yeah, well, we have our general purpose systems, which are our traditional power, Z, X architecture. But Pure Systems and Expert Integrated Systems are really the integration of hardware and software. And they're for client workloads that where they want simplicity, where they want to minimize their staff doing a lot of tuning and custom configuration and really apply that skill to some of the higher functioning business value areas of their data center. To move that 30, that 70-30 needle, right? I mean, you said up front, 70% is spent on keeping the lights on, 30% is on innovation and growing the business. Right, new projects, growing their business. So you really think you can move that needle? We know we can move that needle. We absolutely do. I mean, early indications from our Pure Experience clients would definitely support the fact that we can change the economics of IT and that we can simplify the life cycle. So another important aspect of our Pure Systems is that they're designed for simplicity down to the wiring. So we are very cognizant of all of the aspects of getting a system up and running, designing, deploying, managing over time. All of those aspects we're able to actually quantify and reduce the time and complexity in many, many steps within this IT life cycle. So let's talk about more about that 70-30 mix because it's something that vendors love to throw out there and I think it's real. We all intuitively know that it's problematic, but changing it's hard because we've been hearing it for a long time. Now, my question is this, Nancy, in order to really affect that change, what do customers have to do other than drop in your infrastructure? Do they have to change their operational structures, their organizational structures, their reporting lines? Can you talk about that a little bit? Yeah, so there is actually something that we've learned from our early engagements with clients, so because it's an integrated system that integrates networking storage, server, hardware, software, we're finding that within our client environments that it's not just the server guy or the networking guy or the storage guy that needs to be engaged in in this buying decision. So it actually forces us to actually talk at the C level because it's not any one of those particular roles that are going to own this system. So we're finding that organizational dynamics and the traditional siloed approach to not only the data center, but the roles, the technical roles are a little bit of an impediment here. And so we really have to work with our clients to understand how do you actually embrace this type of a model. So it's breaking down some of the traditional barriers, but it also presents a great opportunity for our clients to combine roles, have people work much more closely together as a team, and we worked with Farster to create a white paper that actually speaks to the organizational dynamics of putting in and the whole evolution around expert integrated systems and integrated systems. What was the takeaway of that research? That in clients that are progressive that are implementing integrated systems that they've already started to change the traditional kind of siloed, contiguous process of integrating technology into their data center and then building and deploying applications, that they're really working much more in a dynamic team type of an environment. So that's one thing. I've noticed that service providers are picking up on this trend pretty rapidly because they've got, I mean they're basically running IT for profit. It's not a cost center. And so these organizational discontinuities, they get blown away very quickly when it comes down to the bottom line. Have you seen a similar dynamic in the MSP market? In fact, some of our early wins have been MSPs. And the reason for that is because they don't have to spend so much of their precious time on making the infrastructure work, right? That's integrated into our systems and they're not spending their valuable resource on that. They're spending time putting the applications and services on top of the technology. So we're seeing that but we're also seeing with ISVs that they have an opportunity to generate patterns that run on these systems. And that's an opportunity for them. So we have a very strong ecosystem both from the MSP side as well as the ISV side in other types of business partners. So let's talk about the patterns because that to me was one of the most unique aspects of your announcement. The notion that you could extract this knowledge and embed it into the systems. And I've asked some of your competitors, where are you at in terms of being able to do that? And the answers I've received, I would categorize as follows. We're working on that, we've just started that, we're building the databases. But I've never really pressed IBM on this in terms of how much is real versus vision. Can you talk about that and maybe provide some proof points? It is actually the backbone of our approach. So we have infrastructure patterns, application patterns, business patterns. And what we've done is we've taken years and years of experience and codified it into these patterns and built them into the system. So that there's a lot of tuning configuration dynamics that the operator doesn't have to do personally that it's already built into the knowledge that the system has around a particular workload or application. Okay, so that's something that you can deliver today. We do deliver it today and we'll continue to build it out. We spent a lot of time here at the event talking to different people about building out the whole idea of patterns. And also customers can create their own patterns and then apply them to the systems as well. So we've got business partner patterns, ISV application patterns, IBM has embedded patterns into the systems. And then we also have, we know that our clients in some very sophisticated environments have created some of their own patterns to use. So an embedded pattern might be, okay, I'm going to take advantage of this portion, the flash or something in this particular workload or something like that. And I know that for this type of workload, you need this type of storage. These are networking requirements. Okay, and you're saying your partners can actually play in that game as well. They are playing already. We have a peer system center. Our peer system center actually includes up to, I think the numbers, over a hundred business partner patterns that our clients can access around specific things like web services, business intelligence. So how's that work? I mean, what is the instantiation of a pattern is what? It's a bunch of code that gets uploaded into your center and then it's shared. They can access the business partner patterns through the peer system center. And actually what happens is they're able to access through the partner's website, that particular pattern. It's a little bit more sophisticated than a catalog. It's kind of a little bit like an app store. And we're going to continue to build that out. And then your customers, you're saying, some customers and more sophisticated customers can do that if they want to. They may not want to because it's competitive advantage for them. Well yeah, they would not probably right now put their patterns in our peer system center, but they can apply them to the technology when they buy a peer flex system, peer application system, peer data system. So can you take us through the naming conventions of peer, help us understand sort of where they each fit. Okay, so at the base, our infrastructure system is the peer flex system. And like I said, it's an infrastructure system that integrates storage, server, networking. It's a single pane of glass management system. And obviously clients can put any kind of applications on top of our peer flex system. It's really cloud infrastructure. It's a cloud infrastructure, exactly. So the next one is peer application system. And our peer application system obviously is great for consolidating applications and it's platform as a service. So it's cloud in a box as well. And you can obviously put all kinds of applications on peer application system and also leverage patterns as well. You can also run data transactions on the peer application system. For certain workloads and environments. So then the newest family members are peer data system, as I mentioned before, and three configurations, peer data for transactions, peer data for analytics, and then peer data for operational analytics. And again, very different types of workloads. So once for transactions, an example there would be high transaction processing. You know, like a commerce application is probably a good example. Is that right? I'd be running DB2 in that example, correct? Yes, you would. And that's packaged in to the offer. DB2, yes, absolutely. So the peer data system for analytics is based on a teaser technology and that's for pediscale type analytics. You know, very high analytical complexity and throughput. And then there's the peer data system for operational analytics. So help me squint through the following. So you've seen a trend over the last several years. People talk about we've traditionally built applications in silos, and we've got purpose built infrastructure supporting those applications, right? And that's how this, you know, silos developed. And now you're talking about something like PureFlex. It's a flexible infrastructure that can support any applications, generally speaking, but then you have these other purpose built package systems. So are we moving toward more toward those package systems, away from those package systems? How's that all playing out? Well, you know, the way you have to look at it is our clients have complex data center environments. I don't know who's water this is, but you can have it. Thank you. So, you know, there's not one system for our client environment. Some clients just want PureFlex and they want to run whatever type of application they have and they want the utmost choice and flexibility. So that would be your PureFlex system. Pure application system has WAS and DB2. So you're going to need to focus on running applications that obviously leverage DB2 and WAS and then WebSphere. So different things for different needs. And then with the pure data systems, you also have very different underlying computer science needs, depending upon what you really want to do with your data. HiveM talks a lot about horses for courses, reference to horse racing and certain horses run well and certain courses, tight turns, long turns, whatever. That's sort of your philosophy there, isn't it? It is. And, you know, some of our competitors believe that one size fits all. That, again, folks would be oracle. Yeah. But one size. You can't say that. One size. But you don't because you guys are above that. You're very professional. Yes. But we at theCUBE will cut through, bring the signal through the noise. That's oracle. That's oracle. We're talking about one size fits all. One size does not fit all. But so when you say one size fits all, let's explore that a little bit, because it sounds good, I like it. But we're talking about one database, right? Always, it's this, I'm saying in the oracle. In the oracle world, yeah. RedStack, one database. And you can only run oracle applications. You can only run their hypervisors. You can only run their version of Linux. Yeah, okay. It's an oracle world. So if you want OVM, you know, oracle apps, that might be great. Right, but we hear from a lot of our clients that they really don't love the whole lock-in idea. And that's a very strategic difference in our approaches. We're not locking our clients in. You can want to run competitive applications, run them on our Pure Flex system. So we offer choice and flexibility across the whole family. Okay, so let's again, I want to press you on that a little bit. So apps, you're cool with that. Run any apps you want on our systems. IBM servers though, right? You can't bring in other people's servers, or can you? No. Okay, so all right, servers cool. Storage, V7000, but you can bring in other people's storage and hang it off that. That's unique. I think maybe only Hitachi has the capability to do that. Maybe there's some others out there with some bolt-ons, but that's unique as far as the mainstream leading server suppliers. Fair enough. Yeah, I mean, you can't integrate it, but you know. Once you put that package in, you can hang any storage off the V7000, right? Networking's obviously integrated and it's kind of, okay, outside the box, that's fine. And hypervisors? Any. Anybody you want. So IBM, VMware, anybody putting OVM on Pureflex? Never mind, you don't have to answer. Don't go there. But yeah, actually, yes. Okay, so pretty good on Pureflex, OVM. Pretty good on the flexibility choice meter. I would argue as good as anybody, I guess. I mean, there's some that- Yeah, think about it. Yeah, I'm thinking about it. I can't think of anybody who's more open if you define open as choice. I mean, they're all lock-ins. I mean, let's face it, right? Customers are concerned about that, right? You have footprint. You're packaging the stores, the servers, and they're networking together. Don't forget, you can't get the simplicity and you can't get the performance from, you know, built-in expertise integrated by design and simplified experience if you don't make some choices for your customer. Absolutely, it's a trade-off. And customers appreciate that. So one of the things that was, I think, even more compelling at the announcement than the 70-30 was the percentage of spend that goes toward labor. Yeah. And it's ironic that we live in an industry that's supposed to be automating things and yet almost two-thirds of the spend is on people. Yeah. And that's really the problem that you're attacking with integrated systems. So that's the trade-off, folks. Yes, there may be some lock-in, but if you want to attack that labor problem and shift to those more innovative, shift that 70-30 mix, you've got to make that trade-off. Yeah, because the technology costs have actually improved over the years. So you're referencing, you know, the historical view of server pricing versus labor associated with managing your infrastructure. So you had to make your own decision. So I'm going to ask you, Nancy, what do you tell the customer? So I talked to Mills at the launch and I asked him, what's the price premium for this integration? There should be this value, there should be a price premium. He said, I approve all the pricing. And he said, there is no price premium for this. And I said, well, why wouldn't anybody buy it? He says, because they're afraid of lock-in. I said, okay, so what do you tell the customer who says that to you? Nancy, I'm afraid, you know, sounds good, but I'm afraid of the lock-in. What do you tell them? Well, like I said, I mean, I think our approach gives them maximum choice and flexibility, you know, with the type of system that we're talking about here. And for many clients, you know, that's going to be good enough. Do you look them in the eye and say, look, we're not going to screw you down the road. We're in this for the long haul. We're not Oracle. We're partners. Right. So that's what I'm saying to the audience. Well, the other important thing to know about these systems is we have built-in investment protection. So, you know, whether it's design of the chassis, design of the power cords and the elements within the system, we've built it for 10-year investment protection. So it's not like some of our competitors who will change the chassis or change a component of the integrated system, which requires you to redo everything. Yeah, so you got to really be careful in this space. You really got to look at what we're talking about here. What you're getting now, so the allure of integrated systems is that simplicity piece, drop that block of infrastructure in and away you go, right? And you get this concierge service, the white glove service, but you really have to be careful that you understand the motivations of your supplier is what I always tell our customers in the Wikibon community. So, you know, the old buyer beware, caveat emptor. All right, this is good. Again, maximum choice and flexibility with peer systems. So how's it going? I mean, you guys launched, you said in April. Yeah, and we just launched again. And you re-launched a couple of weeks ago, so. So we have a lot of momentum with clients. Was the future, I mean. Yeah, well, we've certainly invested a lot in this approach and we're committed to it. We understand this is the beginning of our journey with peer systems. And like I said, the feedback from clients are that we are on the right value proposition. So they're very encouraging in terms of our continuing to deliver on this value proposition and build these systems out over, you know, years to come. Excellent. All right, Nancy, well thanks very much for coming on theCUBE and taking all my peppering questions, you did a great job. All right, keep it right there. We'll be right back. This is Silicon Angles theCUBE, Dave Vellante live from Las Vegas. We'll be right back.