 Live from Times Square in New York City, it's theCUBE, covering IBM's Change the Game, winning with AI, brought to you by IBM. Hello everybody, welcome back to theCUBE's special presentation. We're covering IBM's announcement, changing the game, winning with AI is the theme of IBM's event. IBM has these customer meetups, analyst meetups, partner meetups, and they do this in conjunction with Strata every year. And theCUBE has been there covering, I'm Dave Vellante, with us is James Wade, who's the director of application hosting at Guidewell, and Heymanth Manda, who's the director of platform offerings at IBM. Gentlemen, welcome to theCUBE, thanks for coming on. Thank you. Heymanth, let's start with you. Platform offerings, a lot of platforms inside of IBM. What do you mean platform offerings? Which one are you responsible for? Yeah, so IBM's data and analytics portfolio is pretty wide, it covers the $6 billion business, and we have 100-plus products. What we're trying to do is we're trying to basically build a platform through IBM Cloud Private for Data, bring capabilities that cuts across our portfolio, and build upon it. We also make it open, support multiple clouds, and support other partners who wants to run on the platform, so that's what I'm leading. Okay, great, and we'll come back and talk about that. But James, tell us more about Guidewell, where are you guys based, what do you do and what's your role? Guidewell is the largest insurer in the state of Florida. We have about six and a half million members. We also do about 38, 39% of the government processing for Medicare, Medicare, Medicaid claims. Very large payer. We've also recently moved into another provider space. We actually have clinics throughout the state of Florida where our members can go in and actually get services there. So we're actually morphing as a company, away from just an insurance company, really to a healthcare company. Very exciting time to be there. We've doubled in size in the last six years from a $6 billion company to, I mean from an $8 billion company to an $18 billion company. So both health insurer and provider bringing those two worlds together and the thinking there is just more efficient. You'd be able to drive efficiencies obviously out of your business, right? Yes, I mean the ultimate goal for us is to just have better health outcomes for our members. And the way you deliver that is, one, you do the insurance right, you do it well, you make sure that their claims are processed and handled properly that they're getting all the services that they need. But two, from a provider space, how do you take the information that you have about your members and use it in a provider space to make sure they're getting the right prescriptions at the right time for the right situations that they're having, whatever's going on in their life. And keeping costs down. I mean there's a lot of finger pointing in the industry. If you bring those two areas together, now we got a single throat to choke. That's right, we get that too. And your buck stops with you. Okay, and you're responsible for the entire application portfolio across the insurance and the clinical side as well. Yes, I have both sides. I mean we have Guidewell as the holding company, we have multiple companies underneath it. So all those companies roll up into a single kind of IT infrastructure and I manage that for the entire company. Okay, and talk about the big drivers in your business. Obviously on the insurance side, it's the claim system, the lifeblood, the agency system to deal with the channel. Now of course you've got the clinical thing to worry about. But so talk about sort of the drivers of your business and what's changing. Right, I mean the biggest change we've had obviously in the last few years has been the Affordable Care Act. It changed the way that from a group policy where if you're a big corporation and you work for a big corporation, that company actually buys insurance for you and provides it to other employees. Well now the individual market has grown significantly. We're still a group policy insurance company. Don't get me wrong, we have a great portfolio of companies that we work with. But we also now sell directly to individuals. So they're in the consumer space directly. And that's just a different way of interacting with folks. You have to have sales sites. You have to have websites that are up where folks can come and browse your products. You have to interface with government websites like CMS has their site where they set up and you're able to buy products through that. So it's really changed our marketing and sales channels completely. And on the backside, the volume of growth. With the new individual insurance market, we've grown in size significantly on a number of members. And that's really stressed our IT systems. It's stressed our database environment. And it's really stressed our ability to analyze the day that we're doing and make sure that we're processing claims efficiently and making sure that the members are getting what they expect from it. So the velocity and change in size is really stressed. So you've got the Affordable Care Act and some uncertainties around that. The regulations around that. You've got things like EMR and meaningful use that you've got to worry about. So a lot of complexity in the application portfolio. And hey, Matt, I imagine this is not a unique discussion that you have with some of your insurance clients and healthcare folks. Although you guys are a little different in that you're bringing those two worlds together. But your thoughts on what you're seeing in the marketplace. Yeah, so I mean, this is not unique because the data is exploding. And there are multiple data sources spread across multiple clouds. So in terms of trying to get a sense of where the data is, how to actually start leveraging it, how to govern it, how to analyze it, is a problem that is across all industry verticals. And especially as we are going through digital transformation, right? Trying to leverage and monetize your data becomes even more important. So yeah, so, well, let's talk a little bit about the data. So your data, like a lot of companies, you must have a lot of data silos. And we have said on theCUBE a lot that the innovation engine in the future is data applying machine intelligence to that data using cloud models. Whether that cloud is in a private cloud or a public cloud or now even at the edge. But having a cloud like experience for scale and agility is critical. So that seems to be the innovation whereas last 20, 30 years, the innovation has been kind of Moore's law and being able to get the latest and greatest system so I can get data out of my data warehouse faster. So changing in the innovation engine, driven by data, what are you seeing? I mean, absolutely. Again, we go back to the mission of the company. It's to provide better health outcomes for our members, right? And IT and using the data that we collect more effectively and efficiently allows us to do that. I mean, if you take, across the board, you may have four or five doctors that you're working with and they've prescribed multiple things to you, but they're not talking. They have no idea what your other doctor's doing with you unless you tell them and a lot of people forget. So just as an example, we would know as the payer what you've been prescribed, what you've been using for multiple years. If we see something using AI and machine learning that you've just been prescribed, it's gonna have a detrimental impact to something else that you're doing, we can alert you. We can send you SMS messages. We can send you emails. We can alert your doctors just to say, hey, this could be a problem and it could cause a prescription collision and you can end up in the hospital or worse. And that's just one example of the things that we look at every day to try to better the outcome for our members. But that's just the first layer. What else can you do with that? Are there predictive medicines? Are there things we can alert your doctors to that we're seeing from other places or populations that kind of match your current, kind of what you look like, what you do, what you think, what you're using? All the information we have about you, can we predict health outcomes down the future and let your doctors know? So exciting time to be in this industry. Let's talk about the application architecture to support that outcome because you're not starting from a green field. You probably get some cobalt running and it works and you mess with that stuff. And traditionally you built, especially in a regulated industry, you're building applications that are hardened. And as I said, you have this data silo that really, it's like, it works, don't touch it. How much of a challenge is it for you to enter this sort of new era and how are you getting there? I'd like to understand IBM's role as well. Well, it's very challenging, number one. You have your, I don't wanna call it legacy because that makes it sound bad, but you do have your legacy environments where we're collecting the information. It's kinda like the silos that have gathered the information, the sales information, the claims information, that type of stuff. But those may not be the best systems currently to actually do the process and the data analysis and having the machine learning run against it. So we have really complex ETL moving data from our legacy environments into these newer open source models that you guys support with IBM Cloud private for data. But basically, moving into these open source areas where we can kind of focus our tools on it and learn from that data. So having your legacy environment and moving it to the new environment where you can do this process and has been a challenge. I mean, the velocity of change in the new environment, the types of databases that are out there with Hadoop and the products that you guys have that run through the information, that's one of the bigger challenges that we have. Our company is very supportive of IT. They give us plenty of budget. They give us plenty of resources. But even all the support that we get, the velocity of change in the new environment and the AI space and the machine learning is very difficult to keep up with. Yeah, and you can't just stop doing what you're doing in the existing environment. You've still got to make changes to this. You've got regulatory, you've got HIPAA stuff that you've got to deal with. So you can't just freeze your code there. So are things like containers and cloud native techniques coming into play? Absolutely, absolutely. We're developing all, we kind of drew a line in the sand. Our CIO about two years ago, it's a line in the sand. Everything that we developed now is in a cloud-first strategy. That doesn't necessarily mean it's going to go into the external cloud. We have an internal cloud that we have. We have a very large power environment at Guidewell. Our mainframe is still sort of a cloud-like infrastructure. So we developed it to be cloud-native, cloud-first. And then if it more than likely stays in our four walls, but there's also the option that we can move it out, to various clouds that are out there. There's an IBM cloud, Amazon, Microsoft, Google, any of those clouds. So we're developing with a cloud-first strategy, all the new things. Now, like you said, the legacy side, we have to maintain. I mean, still the majority of our business is processing claims for our members, right? And that's still in that kind of legacy environment, runs on the mainframe and the power environment today. So we have to keep it up and run as well. How large of an organization are you? Headcount-wise? We have about 2,100 IT people at Guidewell, probably a 17,000 person organization. So there's a significant percentage of the population of our employees that are IT directly. I was at a, right, it was an IT heavy business, always has been, I was at a conference recently and they threw out a stat that the average organization has eight clouds. And I said, we're like a 60-person company and we have eight clouds. I mean, you must have 8,000 clouds, as in when you throw in the SaaS and so forth. But you mentioned a number of other clouds, you mentioned IBM Cloud and some others. So it's a multi-cloud world, right? Okay, so I'm interested in how IBM is approaching that, right? You're not just saying, okay, IBM Cloud or nothing, I think, and Cloud is defined on-prem, off-prem, maybe now at the edge, your thoughts? Yeah, so absolutely, I think that is our strategy. We would like to support all the clouds out there. We don't want to discriminate one versus the other. We do have our own public cloud, but what our strategy is to support our products and platforms on any cloud. For example, IBM Cloud Private for Data, it can run in the data center, it can provide the benefits of the cloud within your firewall, but if you want to deploy it on any other public cloud infrastructure, such as Amazon or Red Hat OpenStack, we do support it. We're also looking to expand that support to Microsoft and Google in the future. So we're going forward with a multi-cloud strategy. Also, if you look at IBM's strength, right, we have significant on-premise business, right? That's our strength. So we want to basically start with enterprise out. So by focusing on private cloud and making sure that customers can actually move their offerings and products to private cloud, we are essentially providing a path for our customers and clients to move to cloud, embrace cloud, so that's been our approach. So James, I'm interested in how you guys look at cloud first. When you say cloud first, first of all, I'm hearing, it's not about where it goes, it's about the experience. So we're going to bring the cloud model to the data, wherever the data lives. It's in the public cloud, of course it's cloud. If we bring it on-prem, we want a cloud-like experience. How do you guys look at that cloud-like experience? Is it utility pricing? Is it defined in sort of agility terms? Maybe you could collaborate. Actually, we're trying to go with the agility piece first. The hardest thing right now is to keep up with the pace that customers demand. My boss, Paul Stallings, always talks about consumer grade is now the industrial strength. You go home at night, your network at home is very fast to your PC at night. Your phone, you just hit an app, you always expect it to work. Well, we have to be able to provide that same level of support and reliability in the applications we're deploying inside of our infrastructure. So to do that, you have to be fast, you have to be agile. And our cloud would first be, how do you get things to market faster? So you can build your servers faster, build out your networks faster, build your databases faster, already have defined sizes. Click a button and it's there. On-demand infrastructure, much like they do in the public cloud. We want to have that internally. But second, and our finance department will tell you, is the most important is the utility piece. Once you can define these individual modules that you can hit a button and immediately spin up and instantiate, you should be able to figure out what that cost the company. How do you define what a server cost, total cost of ownership through the lifetime that server is for the company? Because if we can lower that cost, if we can do these things very well, automate them, get the data where it needs to be, spin up quickly, we can reduce our administrative cost and then pass those savings right back to our members. If we can find a way to save your grandmother $20 a month off for health insurance, that can make a lot of difference in a person's life. Just by cutting our cost on the IT side, we can deliver savings back to the company. And that's very key to us. And in terms of sort of what goes where, I guess it's a function of the physics, there's latencies involved, the economics, as you mentioned, are critical obviously in your business. And I guess the laws, the edicts of the government. Yes, and the various contracts that you sign with companies. I mean, there's some companies that we deal with the state of Florida that want their data to stay in the state of Florida. Well, if you move it out to a various cloud provider, you don't know which data center that it's in, so you have to go, there's the laws, the regulations based on your contracts, but you're exactly right. What have you signed up for? What have you agreed to? What are your members comfortable with as to where the data can actually go? And does, how does IBM help guide well in other companies to manage through that complexity? Yeah, absolutely. So I think we are, in addition to what James mentioned, it's also about agility, because for example, if you look at insurance applications, there's a specific time period where you probably would expect 10x a load. So you should be able to easily scale up and down, and also as you're changing your business model, if you have new laws, or if you want to go after new businesses, you should be able to easily embrace that. So cloud provides you that flexibility and elasticity and also the agility. So that's one. The other thing that you mentioned about around regulation, especially in healthcare and also through with financial services industry. So what we're trying to do is on our platform, we would like to actually have industry-specific accelerators. We've been working with the Fortune-Finded companies for the last 30, 40 years. So we've gained depth of knowledge that we currently have within our company, so which we want to basically start exposing as accelerators, and this is on our roadmap and will be available fairly quickly. So that's one approach we're taking. The other approach we're taking is we're also working with our business partners and technology partners, because we do believe in today's world, you cannot go after an opportunity all by yourself. You need to build an ecosystem, and that's what we're doing. We're trying to work with basically speciality vendors who might be focused on that particular vertical who can bring the depth and knowledge that we might not be having, and work with them and team up so that they can build their solutions on top of the platform. So that's another approach that we're taking. So I always ask this question of customers, why IBM? I mean, you guys have been a part of our business for so long, you have very detailed sales guys that are bedded really with our IT folks. You understand our systems, you understand what we do, when we do it, why we do it, you understand our business cycle. IBM really invest in the customers and understanding what they're doing, what they need to be done, and quite honestly, you guys bring some ideas to the table we haven't even thought of. You have such a breadth of understanding you're dealing with so many other companies, you'll see things out there that could be a nugget that we could use, and IBM's never shy to bring that to us. Just a history and a legacy of really bringing innovative solutions to us to really help our business. And very few companies out there really get to know a company's business as well as IBM does. Hey Matt, I'll give you the last word. We got to change the game, winning with AI tonight. You go to ibm.com slash win with AI and register there. I just did, I'm part of the analyst program. So, hey Matt, last word for you. Yeah, so I think the world is changing really fast and unless enterprises embrace cloud and embrace artificial intelligence and leverage their data to monetize new business models, it's very hard to compete. Like, digital transformation is impacting every industry vertical, including IBM. So, I think going after this opportunistically is critical and IBM Cloud Private for Data as a platform provides us. And please, please join us today. It's going to be a great event and I look forward to meeting you guys. Thank you. And definitely agree, it's all about digital means data, applying machine intelligence, machine learning AI to that data, being able to run it in a cloud-like model so you can scale, you can be fast. That's the innovation sandwich for the future. It's not just about the speed of the processor or the size of the disk drive or the flash or whatever it is. It's really about that combination. theCUBE, bringing you all the intelligence we can find. You're watching CUBE NYC. We'll be right back, right after this short break.