 from theCUBE Studios in Palo Alto in Boston. It's theCUBE, covering IBM Think. Brought to you by IBM. Hi everybody, we're back. This is Dave Vellante for theCUBE and you're watching our continuous coverage of the IBM Think 2020 digital event experience and Ed Walsh is here as the general manager of the IBM storage division and software defined infrastructure. Ed, last time you were about four feet to my left. I wish you were face to face, but this will have to do. Thanks for coming on. The new normal. I like to call this maybe the new abnormal as some of us are still in lockdown, but it is the new normal. So we'll see more of this. So welcome it, I embrace it. So Ed, you've obviously seen a number of downturns. You've run a lot of businesses. You've been on rocket ship businesses. You've been at IBM for a couple of stints. Obviously we've never seen anything like this. When did you first start getting visibility? That this was going to be an issue. Obviously you guys have the presence in China and AP. But when did you start to see it and what was your first move for the team? Yeah, sure. And so yeah, I've had the opportunity to lead a couple of businesses in 2000, 2001, 2008. And this is, it is very different. But as far as our visibility on this, we have a worldwide and I would say world class of supply chain. So we saw this start as a supply chain issue and we came into it hot from Q4. We had a very good Q4, so we came into it hot for supply. So we were tracking it early. And then we started to see the issues in China in late January. Then of course they shut down, they came back open after the Chinese New Year and to be honest, they weren't quite back. So we were watching it almost as a supply chain challenge. Yes, we do a lot of business in China. So we were also watching that, but it was a supply chain. But every single day managing that supply chain, I again, I would give a compliment to my team. I don't think anyone has a better supply chain. But then of course it quickly moved and everyone says, well, you should have seen it. This happened really fast. So it's different than the other crises because it actually has to do with humans and lives and all the other crises were financial crises. And we largely just managed the business through it. You worry about your employees from the stress level, but you don't worry about the employees by the health level. So we did see it early with supply chain that quickly got in demand. And to be honest, when Italy went down, well, when Italy had the challenges, it happened so fast with a shutdown, that was kind of a big wake-up call for us. You saw IBM respond very quickly. Everyone was at home almost immediately, even in countries weren't set up for, really took care of our people, but then we immediately, you saw that IBM was gonna work really helping our clients. So we saw it kind of early, but it went from 100% supply chain to a demand issue. And then we did have different real, interesting as a bad word, but interesting supply chain challenges as a quarter went on, different countries stopping shipping is coming in, had to get a government approvals to get things. So it was a good partnership with some of our clients get things where they need to be in the right time. But it was probably, I'll remember this quarter for a lot of different reasons. And it worked out good for us, but to be honest, it was, it is different from the other crises because it wasn't just a financial issue, which I think we're just getting into actually. It was human and you saw different, two of our best regions were Italy and Spain. Now you think, whoa, why, you think, think about all that going on in the quarter in Italy. But it was a relationship, it was, we got our, the IBMers got safe real quick, but then we quickly got them to engage with the clients, but we didn't push them, it was natural. Next thing you know, that trust, I think there was a flight back to quality. And you saw these different companies, now it was the things they had to get done. But it was, it was pretty amazing quarter. To me, it was more seeing the team. You see your teams react to crises and challenges in different ways and sometimes they paralyzed and we didn't see that all in the team, which was pretty intelligent. But we saw it coming from the beginning, probably before this, we saw supply chain as we came into Q1 hot on supply. So we kind of saw it early and we're already doing drills. So we saw it kind of right when it was hitting. But it was interesting, you used the term interesting and it was challenging because it was sort of not only day to day for you, it was probably like minute by minute, hour by hour, country by country, region by region. How did you change the way in which you communicated to your teams or did you? Well, so quickly, so one, I think culture. So I've been in a couple of different companies, big and small, so I've seen different cultures react. And the IBM culture is one that I kind of look back in awe in this last quarter, just because it's very customer intimacy. You don't have to, if the customer's in trouble, you can't stop them from running to help the client. So we saw natural, you know, we, IBM made sure the employees were fine, got everyone at home, but we saw them quickly go after it. So most of it is communication. You do see if these crises, you see some groups kind of freeze and you have to kind of walk them through it and make sure one, they're okay. This one was different, you had to make sure your team was okay, both mentally, physically and their families. And it was a different stress level. It was very personal and affected all of them. Where the financial crises, it didn't affect everyone as much. It was more sterile. This one was, wow, really different from a leadership, but it's all the same. You have to get the team together and make sure they're healthy, happy, and mentally healthy too. And then you have to get people to kind of, how do you go drive and help clients out? In this case, it was help you, make sure your clients are okay, they're healthy. And then what can we do to help them? And I think that became more natural. And then of course, is Biver Cate let's drive the business supply chain, which is I would say with any of the different challenges, but it's all communication. But on this one, it was really had a check with the team often. We also had this new normal. I call this a new abnormal, which also you can't meet with people. So you couldn't get people physically together. So I call abnormal because we're still, we'll get to the new normal and we'll use a lot more remote type of communication. But it was, I've never been so busy. I'm on video calls with all my teams every day. You see people using different tools to communicate like Slack, but also a lot more video. So it's communication communication, which is the same thing. It's all the same thing with teams, getting together, getting good direction. But in this one, it was make sure they're safe first and then move on. Same thing with clients, make sure they're safe. And that was what was fundamentally different about this. Anyway, so. Yeah, you know, Ed, we're both grinders. I always joke. I work a half day every day. It doesn't matter which 12 hours. And I'm the same way, I take 12 hour days and heartbeat these days. I mean, it's just really been crazy. And I have to agree that the teams around the world and our client space, of course, the CUBE teams have really stepped up. But I want to ask you about the quarter. You're right, you came in hot in December, meaning you had a really good CUBE four. You know, I reached out to Tom Ross, Amelia last September and said, hey, nice announcement, Z15. He said, did you cover it? I said, I did. And I sent them my breaking analysis in which I really kind of dug into the life cycles of the Z and how it affects, you know, IBM's overall business. And I predicted this is going to go on for several quarters where IBM has a real tailwind, not only in systems hardware, but also, you know, the storage piece of the systems hardware business. We saw that last quarter, you grew 19% in storage, 60 plus percent in Z hardware. Pretty amazing. What's going on? Unpack the quarter for us a little bit. Yeah, so if it wasn't for the crisis, I think all that would be played. We had some announcements on across the entire storage portfolio. So what we do for storage for Z, both disk intake, big announcements in Q3, directly aligned with what we do with the new Z. You get a lot of value, one-on-one is three, so a lot of synergy between those different platforms. So hit the demand and what clients are trying to do, bring in new, you know, cloud development platforms, you know, native cloud development, but also using cloud. So there's a whole bunch of different things we brought to that platform. But we also launched new AI platforms, so storage for AI and big data. And then in Q1, we launched our new distributed storage. So we're kind of coming in from an offering set. In fact, this quarter, you know, 19% growth, I think it speaks volumes, not on the offering, yes, but more how we reacted to their clients more than anything else. I think it was a, as we talked about earlier, it was an interesting quarter, and I think it's clients who are responding to the flight or quality, but also who's engaging with them the right way. So we do have a completely refreshed offering set across, in fact, this quarter, every single one of our offerings, every single one of our offerings grew, which is more risky if you have the right offerings, meet in the market, helping them with, we use the term chapter two, right? You know, and during the cloud, moving, modernizing your environment, we needed to free up our teams. We did a dramatic simplification on what we do with storage or Z, but also distributed storage and what we do for storage AI and a big focus in cyber resiliency. Those are hitting what I'll say the market was in Q4, but they happen to also be hitting the market for what's going on now and into the new home. So a lot of the simplification was that how do you remote manage? How do you do things? In fact, one of the biggest things we do to our clients is we have all these tools. We give you a lot of things for free baseline, but we also have these increased like pro versions. We're just said, take them, use them because it allows you to monitor and manage your environment better remotely is all web-based. And that was one of the biggest things to do, but that is hitting the market. That's the new normal. And we did that across both Z, distributed storage, but also what we did in cyber resiliency and AI. I want to hit on a couple of those points. I want to start with the cyber resiliency because we were one of the first to report with our partner ETR, our data partner that the work from home offset was somewhat cushioning the downturn. I mean, it's ugly, but still work from home pivot. And that included solutions around ransomware, data protection, cyber resiliency. So investment, actually 20% of the CIOs that we surveyed actually plan on spending more in 2020 because of there wasn't just Zoom and Webex, it was other infrastructure around it, VDI, et cetera. So you're seeing that, it sounds like. Maybe talk a little bit about sort of cyber resiliency. And I'm especially interested in the context of going forward. It feels like this is going to be one of those permanent things where, clients might sacrifice some near-term profitability to have more flexibility and resiliency in their business and not rely so much on just narrow DR, but more business continuance. No, I think in fact, we've always been, leader in business continuance and we still are, but cyber resiliency is just fundamentally different. In fact, recovering from a ransomware or a malware incident is different, fundamentally different tool sets than what you're doing. You need to have copies of that, of course, but very different than when if you were DR, single server come after running. So you see us and mostly, I think we're ahead of it because as IBM, we're the largest outsource from the world. So we actually live with these incidents as IBM. So in normal storage, you hear about them and typically it's a storage issue, that issue that came back around and we are living with what we do in our storage or outsourcing or strategic outsourcing group. And so we're putting into all of our products a lot of unique things around cyber resiliency. So what we did for storage for Z, it literally is a safeguard copies and offering that literally gives you 500 cover points that have been separated administratively and physically. So you're able to literally internal and external threats protect yourself. Best in class, no one else has a solution is that we did the same thing in distributed. So, but in distributed, what we're trying to do is help people, not only I use the term left to boom and right to boom. Left to boom is before your incident. How do you prepare? How do you have the right backup recovery? How do you have the right tool sets, recover points? How do you protect yourself? How do you make sure you're monitoring for ransomware every single night with your backup recovery tools? But the right of boom is once you do get hit you go into this instant response situation where eyes are on you, lights are on you. How to give the humans the right tools so they can react the right way and be quick. So also in storage plays a huge role with ransomware malware. Also, you get the call, the boom hits, you get the call, it's from the CEO, you gotta fix it. You need new tools. Like what recovery point do you go back to? It's iterative in nature. Well, you get hit on, I get a call on Friday but I don't know when the malware got in there. Was it Wednesday or Tuesday? It might be different per system. It's an iterative process. You need the right tools to use all your copies, primary storage, secondary storage, tertiary copies, DR copies and find out what's your best recover point and it's iterative. You have to literally bring up environments. You have to have fence network capabilities and all your tools to allow you to literally bring them up quickly in succession or altogether. Find the best recover point and get to it as soon as you can. So those are things I think we're leading and we launched all this before this issue. We also saw an increase in malware in our client set. So to be honest, even with all this crisis we're seeing an increase. And the malware ransomware is where the storage infrastructure layer really matters in that instant response capability where if you have an instance, someone stole your data sets and typically these storage guys not gonna get a call. Now IBM has great solution sets around there. AI driven capabilities to allow you to protect yourself there. But this is on ransomware. It's something that storage plays a huge role. We do undistributed. We do our mainframe with specialized solution sets. No one else in the industry is doing that. And of course backup and recovery and quick recovery in an orchestrated fashion. That's what we do around Spectrum Protect all day long, right? Yeah, last time we met, you shared with us your consolidation strategy, your big announcement last fall. And obviously, great quarter, 90% growth. A lot of that was sort of drafting off the Z and the DS-8900. But I'm wondering how that consolidation play worked. We talked about the challenges of doing that. The importance of that, how others are going to have to respond. And we're seeing that in the industry for a lot of the large portfolio players. But how did that, how's that going? Can you give us, what can you tell us about the progress there in terms of its uptake and adoption? Sure, so really what we did is we kind of looked at the industry and said everyone's adding too much complexity. The whole industry is based upon having a high-end, mid-range, and low-end storage environment. And the high-end did everything, cusp on silicon, great performance, but you had to pay a price for it. And then the whole industry is based upon just getting to the next gen. So if you're high-end, by the way, the problem is every client has high-end, mid-range, and low-end storage. So you have dual vendor strategy. But what you do is you have to, the whole industry is just getting to the next gen, high-end, you see EMC Dell, hashtag next generation mid-range storage. The whole industry, including in the past IBM, was structured and getting there. So we basically announced, no more of that, doesn't make sense. It used to, it no longer makes sense. We drive a lot of innovation in what we're doing with silicon, but software, we need one platform, one platform that allow you have different price points up, down the stack, from low-end, mid-range, and high-end, but without compromise. So it's a dramatic simplification, right? That was a well-respected, I would say we had an unbelievable response from that. And you saw a dramatic growth. So you're kind of hit upon, we grew across all of our segments. Yes, we had a good growth on what we do for storage for Z, but we had an equally good growth as we did around distributed storage. So if you have physical environments, virtual environments, VMware, Hyper-V, containers, public cloud, hyper-cloud, our distributed storage portfolio, saw one of the biggest increases. And again, we grew in every one of these segments. So one, the simplification, chapter two, how do you free up your team? How do you modernize your applications so you can innovate? It's critical you're free up your team. So that one thing, now we also did a lot of, Billy do remote management, made it very simple to use and simple to support, which also helps in the new normal, but it hit the right tone with it, our partners, but also our clients. And you saw a pretty massive uptick after the February announcement. So it's only half a quarter. We saw quite a large left. I want to ask you about the storage for big data and AI as well. There seems to be a new emerging workload. You got all this data out there that we collected and Hadoop and analytics over the last 10 years. Now you're applying, we've talked about this, the new innovation cocktail. You got data, AI and cloud gives you the scale, whether it's on-prem or in the public cloud, but there seems to be a new workload where you get kind of a data store. You've got the analytic workloads that are in there. You've got some data science tooling and other AI that you're applying. That seems to be an emerging workload, kind of beyond just kind of infrastructure as a service, but a really new way to get insights out of data. Data is plentiful, insights are not. It's Bob Pizziano used to say. So talk about that workload and how that is powering your business and what are you seeing there? Well, I think this is where I see IBM really helping clients for this journey to building smarter businesses because AI is going to be at every workload. You're bringing up very specific workloads around machine learning, deep learning, bringing cusp on silk kind of like GPUs into it on these big data lake. How do you take a data swamp and make a data lake? But what I'll say is IBM's doing this and we use the term ladder to AI and there's no AI without IA, information architecture. You have to have the right infrastructure to do it. We also see different groups having random acts of AI. A data scientist in division A does something that's kind of interesting. Another group does something interesting and maybe a third. It's like the early days of data warehousing, but they're not able to take it together and bring it so they can infuse AI across all the processes in a company and have one single view of truth. So we see people going through this natural progression. Some start independently and fight the technology. Some bring it together. So everything we're doing from, I'll talk about what we're doing is storage, infrastructure, servers, but also across what we're doing that are cloud packed for data offering and make it very simple for you to deploy and get the use case out of it. But for storage is about when you want to bring it together, you need the right performance. So we bar none have the best storage for AI data. It's based upon our, you know, literally award winning, you know, scale up file system called GPFS or spectrum scale. It runs the largest AI supercomputers in the world. The same as X software, you can buy it a 2U device that we launched in December, which is called our ESS 3000. It's a single all flash array. It's a cluster, but you can no compromise. You go from that 2U device to the largest AI supercomputer in the world configuration. The exact same technology, hardware and software that we deployed. So now you can start small and grow. And then we're helping along, how do you get the value out of it? So that's typically where storage ends. I gave you the best platform you can possibly have. Cost effect is small and you can scale to the biggest thing you want to do. The next thing we're doing in which people say, well, that's not storage. Ed, why are you doing that? We're doing things called spectrum discoverer. It's managing your metadata to making your data scientist the most productive possible. They spend any 80% of the time literally just understanding the data, tagging the data, organizing it so they know what they're doing with. Because if you don't have the right AI data sets you really think that they outcome. So we have what's called spectrum discoverer works across a whole bunch of other products but also all of our portfolio both object storage file system blog allows you to look at an environment, organize it and save dramatic amount of time for data scientists. And of course that's easy feed-in to all the things we do around cloud pack for data which is where IBM is really putting a lot of these open source and our own tools together so you can move forward pretty quickly. The key thing is how does IBM help you not fight technology? We know what you want to accomplish. Let's help you but not limit you by we're letting you use all the different open source tools that you data scientists want to allow you to move forward and help you in that journey. And it is a journey and we're meeting clients where they are because everyone's on a different I guess segment of the journey and how do we help you go through it? And from a storage you're seeing that environment literally double every quarter. For the people that are looking for it no one really touches us. In fact our number two and three competitors in the space use the same software that we OEM do them. So we're in a very good position when it comes to storage for AI and good data. So they say it's better to be lucky than good. I say it's better to be good and lucky. And so we're not going back to the 2010s. It's not happening. We've got this new abnormal as you call it. I like that phrase. And you've done a lot of the hard work in terms of rationalizing the portfolio. You've done the R&D and you started this years ago and it took a long time. But I wonder if you could just talk about why you feel like you're in a good position coming out of this thing and who knows how we're going to come out of it. But what are the critical components that you feel you have in your arsenal that will make you stronger and more competitive relative to the landscape out there? Your thoughts? Yeah, so, you know, this is going to sound, well, okay, so all these different issues we've been through, all these crises we've been through in our careers, there's an old adage if you can last room and you get resource, you can come out stronger. And it's very true. So you can grow, you can do the right things but you have to have the right offerings. Sometimes that's low lucky you entered right. I think we entered perfectly with the right innovation that did because years ago but we're hitting the current market but also what I'll say is the new normal market. And I think that's an opportunity. And I've always said, listen, the world doesn't need another storage ray but they're looking for solutions around the source challenges. And I think what we've done around the product portfolio with we use the term offerings was the offerings we put around it with a different software allows you to actually truly free, you know, if it's really chapter two, now we're trying to monitor your core infrastructure you need to free up your team so they can innovate. We're going to do that dramatically in what we do in storage. We're going to help you with that journey to cloud either on-prem or into the public cloud or really what we see is a hybrid multi-cloud fabric happening but also we do cyber resiliency as we built them from the core. So I think we're hitting it right. Now the new normal is all the things that it has to be simple, it has to be role managed. And those are all the things we made massive investments across every one of our portfolio items that just got launched the last two quarters. So I think we're in good stead but to be honest in these times as we talked earlier, you work harder you've got to really embrace the client feedback. I think IBM is a good position to do that. Also with a greater IBM we see a bigger opportunity set to find out how to help clients. So we're the number one AI company in the world. So we're seeing what clients really want to do with AI and how the infrastructure is holding back. Number one outsourcer, we're seeing how people are really dealing with cyber resiliency and especially malware, ransomware where storage really impacts you. We're seeing exactly how to do it and what tools to push forward and that's where you're seeing very unique opportunities. And in these times, if you can have the right product the right go to market, you can do very well and more importantly, you do it by helping clients. If you can help clients through this do you come out stronger? I think some other people in storage it becomes more challenging. I don't think people just wants, you know the next flash array. I think they're looking for solutions that's and companies to help them get through and get to really the new I think we're going to get to the new normal. I think this is the new abnormal. I can't call it normal when we're all locked away. The new normal is going to be much faster. You're going to have to go faster. So I think IBM and IBM storage is aligned with let's help you with the cloud journey. Let's help you build our businesses. We'll make sure cyber resiliency built in there. But we're going to, you're seeing it across every division of IBM step up and help you in that direction. That's where I think it's differentiated. That's why I'm excited about what we're doing at IBM in general but also the IBM storage is perfectly aligned with that overall mission. And it's kind of exciting to see it kind of play out in front of clients. Well, I think you're right. In the last decade was, you know a lot of it was about the all flash data center and the future is about powering innovation infrastructure for machine intelligence and really getting insights out of data, scaling. Ed, Ed Walsh always great to have you on theCUBE. Hopefully we can do this, you know a little closer face to face, maybe six feet apart and then eventually we could shake hands or high five or whatever works. Thanks so much for coming on theCUBE. It's great to see you looking good. And stay safe. Hey, thank you. Stay safe. All right, and thank you for watching everybody. This is Dave Vellante for theCUBE and our continuous coverage of the IBM Think 2020 digital event experience. We'll be right back right after this short break.