 Live from Las Vegas, it's theCUBE. Covering InterConnect 2017, brought to you by IBM. Welcome back to InterConnect 2017 everybody. This is theCUBE, the leader in live tech coverage. Russ Kennedy is here, he's the vice president of product strategy and customer success at IBM. Russ, good to see you again. Good to see you Dave. So Russ, of course you and I have known each other for years, from the Cleversafe, you guys came in from the Cleversafe acquisition, a phenomenal move for you guys, great exit, awesome move for IBM. So we're now, well over a year in, so the integration, you've been long past blue washing, you're now in and you're integrating with other services, you're embedded in the cloud, still selling on-prem, hybrid messaging, so give us the update, what's happening at InterConnect. Sure, well thanks for having me on, it's great to see you again and you're absolutely right. I mean things have been moving very rapidly since the acquisition, it's about 15 months since we've been part of IBM now and we still have a very robust on-prem business, that was our heritage in the Cleversafe days, but now that we're part of IBM, we're well entrenched in the cloud, we've got cloud services, object storage services in the cloud and a variety of different flavors there, we announced a couple of new things this week that I think are very exciting for clients, I'm sure we'll get into that as we go through this discussion and we have a hybrid combination, so if clients want to have some of their data on-prem, some of their data in the cloud, we offer that hybridity as well and I think that's very exciting for enterprises that are looking to figure out where their workloads run best and be able to have that flexibility to move things back and forth. We were talking off camera, I remember I was saying to you, Cleversafe is one of Wikibon's first clients back when we were, you know, tiny and you guys were just getting started and I remember we were working with you guys and sort of talking about some positioning and things like that and I remember saying, look it's going to cloud, it's all going there and at the time it was like, you guys were saying, yeah, we think so too, but it's just not here yet, you know? Small startup, you got it, so you have the conviction of belief that it's going to happen, but at the same time, you have to survive and you know, you got investors and then it, but the growth of unstructured data and then all of a sudden the combination of that plus cloud happened and then boom, that was a huge tailwind, talk about that. No, that's, you're exactly right. I mean in the early days, it was very, very difficult to get people to understand the value of object storage and understand the value of cloud and we were out there pioneering discussions around this concept, but we knew that the wave was going to happen. You know, the growth of unstructured data was already obvious. You had music services, you had video services, everything going online, people wanting to distribute information and share information and so you knew that the wave was coming. It took a little bit longer than I think everybody thought. I think certainly success in other public cloud services like Amazon and Microsoft kind of helped drove that as well, but we were certainly there with leading technology and as soon as people started to realize the benefits of object storage for storing large unstructured data objects, it just took off. Well you know, too, the cloud progression was really interesting, you're right, Amazon sort of popularized it and then the downturn in 2007, 2008 caused a lot of CFOs to say, hey, let's try this cloud thing and then they came out of it and said, hey, this cloud thing is actually really cool. Well, let's operationalize it and go mainstream and so and now you've got this big discussion going on around data value, right? Everybody's talking about the value of data, what it means and moving conversations up the stack away from sort of bit slicing and object stores and up to data value. No, you're exactly right. I mean, I think that's another new interesting area that we're getting into. It's the value of information and I think what's driven that is the tools and the technologies that are now available to analyze data in variety of formats, right? The whole analysis and analytics capability that exists in the marketplace today is giving organizations a reason to take it, look at their data and to leverage their data and to use their data to drive business outcomes, to be more competitive, to be more agile, to be more flexible. So they're using the information they have tools now that can give them insight into all kinds of things. Their own data, external sources of data, new data that's being generated through applications and those kinds of things. All that can come together and analysis can go on top of it to give people really quick insights into how to drive their business and I think that's the really exciting part about being part of IBM's cloud because IBM has all those tools. I mean, we've been having conversations now for, it's well over several months and going into years where the CIOs are not so much thinking about storage, certainly not worried about the media, but definitely talking about what services can I tap to enhance the value of my data? How do I monetize? Not necessarily data itself, but how does data contribute to the monetization of my company? And you guys fit into that. So maybe talk about that a little bit. Don't forget. We talk to clients all the time about the value of the data. Regardless of what industry you're in, I mean financial services, healthcare, manufacturing, all of those types of organizations have information and it's information that can help them be more productive, it can help them be more agile, can help them win in the marketplace. All they need to do is open it up and use it, leverage it, analyze it, look at it, look at it from a variety of different sources and it can help them do a lot of things more efficiently. So we talk to clients all the time about the value of data. Storage is certainly something that makes that value realizable and it's the interfaces between applications and tools that make the data usable and we open that up to clients with our storage system very easily, whether it's on-prem or it's in the cloud and that's what they like. Now we heard David Kenny on stage the other day he announced IBM Cloud Object Storage Flex and he said, we do have a marketing department and yes they did come up with that name, funny tongue in cheek moment. But talk about Flex, what is it and why is it relevant? So a lot of clients that we've engaged with recently have talked about, they love the cloud model. They certainly love the simplicity and the ease of growth and those kinds of things that cloud gives them. But they're a little confused about the pricing and they're worrying about whether they're paying too much for the workload that they have in the cloud. So we designed Flex as a way to look at storing data. First of all, it's a very low cost entry point for storing the data and then it's designed for data where the workload may be unpredictable. It may be cold for some period of time and then it may become very active for a period of time and then go back to being cold again. What Flex does is it ensures that you don't overpay when you actually utilize that data. When it's very active, very hot, maybe you're running some sort of analytics against that data, maybe it's some sort of cognitive recognition analytics process that you're running against the data. It makes it very usable but yet you're not paying too much to access that data. So Flex is designed for those kinds of uneven, varied workloads or workloads where it's very cold for some period of time and very hot. Traditional tiers are designed for hot workloads, mid-level workloads and very cold workloads. Flex actually covers the whole gamut and it ensures that you're not paying too much for storing and using your data. So that's a problem that people have because they don't really understand how to optimize cost if they don't understand their workloads. They get the cloud bill at the end of the month and they go, whoa, what just happened? It's complicated for people. There's a lot of times it's different APIs for different services. So talk a little bit more about how customers, how you see customers deploying that and what it's going to mean to them. What's the business impact? Yeah, no, it's a great question. So Flex, first of all, you only have to remember four numbers. There's a number to store the data, a cost to store the data, a cost to retrieve the data, a cost for what we call class A operations which are write operations and then class B which are read operations. Four numbers you have to remember. You know that you're not going to pay over a certain amount regardless of how often you use the data. So it's very simple for people to understand. It's one set of numbers. Doesn't matter what the workload is, you know you're not going to be overcharged for that workload. You set a threshold. Exactly, you set a cap, you set a threshold and you're not going to pay over that amount. So it's very simple for them to utilize. Then, so they start to use it and let's say that over a six month period of time they start to understand their workload and they know it's a very active workload. They can then change that data into maybe our standard tier and actually even save more money because it's consistent, it's predictable and it's active, they'll actually lower their cost. And we're very open with clients about that because we want to take away that complexity of using the storage and certainly the complexity of billing like you talked about and give clients a very easy transition into the cloud and make sure that they can use it and leverage it the way they need to to be more productive. So the key to that is transparency and control. Absolutely, absolutely. That's an elastic sort of dial up, dial down as you need it. Very much so, yes, definitely. I wanted to ask you, so we've been obviously watching IBM made the software acquisition was like, okay, we get there to buy this bare metal hosting company and then they bring in blue mix and then they start bringing in applications and then all of a sudden it's like IBM does what IBM does. Boom, now you've got this machine going and so several acquisitions that are relevant here. Espera, Clearleap, Ustream fits in because we know Ustream because we broadcast on Ustream and of course Cleversafe. Are you beginning to leverage those acquisitions and potentially others through blue mix to create services and new value for clients? Yeah, so we're fully integrated with all those technologies, right? The object storage system through our APIs, every single one of those technologies can leverage and utilize the storage system underneath. I'll give you an example. Espera, as you mentioned a very, a very prominent product in the marketplace. I think just about every company in media and entertainment certainly any company that's dealing with large unstructured data objects knows and uses Espera. They have a service now in the cloud where you can actually move data very rapidly over their protocol into the cloud and then store it in the object storage system. You know, that's easy, that's simple. That makes it easy to start to leverage cloud. Ustream the same way, Clearleap the same way. All of this comes together in blue mix. Blue mix is the glue, so to speak. So if you're developing new applications you have all of the blue mix tools that you can use and then you've got all these technologies that are integrated, including the object storage system which is the foundation, you know, everything's going to, all the data's going to, you know, reside in an object storage system. That makes it all usable for clients. Very simple, very easy. They have a whole portfolio of things that they can do and it's all tied together through APIs. It's very, very nice. And has that opened up, you know, when your small startup, you know, you don't have all these resources. How has it opened up new opportunities for you guys? So we see a lot of new startups coming on board and taking advantage of the storage system and all the different services that sit on top. You know, many companies today are born on the cloud or there are new applications that are being born on the cloud and so they have access to not only infrastructure, like you said, within blue mix. They also have access to other services, video services, high speed data transfer services, object storage services. So they're able to take advantage of all those different services, build applications very quickly. Another thing that's interesting about IBM, they had this concept, you may have heard of it, this blue mix garage concept, which is a rapid deployment, rapid application development, using design thinking and agile methodologies to quickly develop a minimum viable product. That now uses object storage as part of the services, right? So as a new client, you can come in, sit in the blue mix garage, work on the application, have some really rapid prototyping going on and leverage the storage system underneath where that gets you started, gets you going. I can see a lot of new applications coming to market through that same policy. So they're like seven garages, is that right around the world? Yes, yes, yeah, they're around the world. And so I didn't realize, so Cleversafe's a fundamental part of that with the object storage. It is now, we just announced it this week at Interconnect, but it isn't now. So what does that mean? So I go in, I can, it's basically sets of best practices and accelerants. Right, and obviously in the cloud world, you need a place to place your data, right? So the integration with cloud object storage, now Cleversafe now called cloud object storage, is now all part of that. So it's integrated into the app dev that's going on in those garages. And we're excited about that because I think we'll see a lot of new technologies coming through that methodology and certainly ones that leverage our storage technology for sure. What's it been like to go from, you know, relatively small Illinois based startup and now you're in IBM? Right. What was the integration like? Are you on the rocket ship now? I mean you were kind of on it before, but now it's like steep part of the S-curve with all these global resources. Describe that. I think the biggest part that's happened to us as an organization is exposure to a number of different accounts that we, you know, as a small company, may not have had access to. Certainly in certain industries, you know, IBM's in every part of the world in every industry and that exposure from, you know, IBM's go to market has been very, very exciting for us. And certainly global now, right? As Cleversafe, we were only in North America and Europe, for example, and now we're all over the world or have the chance to be all over the world. So that's been really exciting. And then on top of that, the whole integration into the cloud, right? Because the cloud, the cloud, IBM's cloud business unit is the one that drove the acquisition of Cleversafe because they wanted the technology in the cloud. And now that we're there, we can offer storage services, object storage services as a foundation to anyone all over the world. And I think that's really exciting. It's the exposure to all kinds of different businesses that's been exciting since we've been part of it. Yeah, and the speed at which you can get to that, you know, object store as a service, as opposed to saying, okay, knocking on, you know, all the cloud doors and hey, do you want to buy my cloud? They're like, well, you know, we got our own or whatever it is and now it's just boom, global. It's shortened that sales cycle tremendously, right? People are up and running in a few days now or even a few hours, whereas before it may take, you know, months or even quarters to get started, you can get started now just by, you know, going to the portal, signing up for object storage services, starting to write data into the cloud, starting to leverage these other services that we talked about. It's very simple. And the combinatorial effects of what we were talking about before with, you know, like Aspera and Ustream and so forth, you know, give you the ability to add even new services. IBM's always been very good at acquisitions. Yes. You know, we forget that sometimes. Acquisitions are always hard, but we've been fortunate. We've had a lot of support and a lot of help and getting integrated into the various businesses and I think it's been a good journey. So what should we look for? What's, you know, what kind of milestones? Can you show us a little leg on futures? What should we pay paying attention to? We're going to continue to do what clients are asking us to do. We're going to develop features and functions both on-prem and in the cloud. We're going to integrate with a lot of different technologies, both IBM technologies and other company technologies. You may have seen our announcements with NetApp and Veritas this week. So we're going to continue to expand our integration with other technologies that exist in the marketplace because that's what clients want. They want solutions. They want end-to-end solutions both on-prem and in the cloud. So we're focused on that. We're going to continue to do that. We'll certainly integrate with other IBM services as they come to market in the cloud. That's a really exciting thing. So we're going to continue to focus on driving success for our clients and that's exciting. But Russ, belated congratulations on the acquisition and going through the integration. I'm really happy for you guys and excited for your future. Thanks for coming to theCUBE. Thank you. Thank you, Dave. All right, keep right there, buddy. We'll be back with our next guest. theCUBE, we're live from Interconnect 2017. Right back.