 Okay, welcome back everyone to SiliconANGLE's exclusive coverage of IBM Pulse, I'm John Furrier, the founder of SiliconANGLE. I'm joined by co-host Dave Vellante, co-founder of Wikibon.org Research. This is theCUBE, our flagship program. We go out to the events, extract the signal from the noise, talk to the thought leaders, executives, the customers, analysts, and we're here with a great analyst, Leslie Hand, research director at IDC International Data Corporation. Thanks for joining us. Thank you for inviting me. So we love getting on the analyst line because we get to talk turkey without the IBM here. What's the real deal? IBM, huge, huge company, obviously great presence across the board, all verticals. You cover retail. IBM has been in the retail business since it's been founded, really. Think about it. But now more than ever, retail is smoking hot, consumerization of IT, the consumerization of the consumer. So to be wearables, I mean, everything's changing, sensor networks that can detect where you are to store. I mean, radical transformation. What's your take? What's my take of the show? No, retail, retail transformation, and IBM within the retail. So you know, honestly, I mean, we've come so much further down the path towards, you know, that minority report vision of, you know, not even really meeting the retail. It comes at thief. Don't let him in the door. That's right. I'm just going to walk down the street. I'm going to see something I want. I'm going to point at it and put it in my pocket, and it's mine, right? But seriously, IBM has been doing business with retailers for a long time. I mean, half the retailers in the U.S. probably use IBM's POS as their foundation. They use WebSphere, you know, and a whole host of other products. So what's interesting about this show to me is it's really demonstrating that IBM is listening to, we know we're transforming for this new customer and we can't do things the way we used to do it. That means you can't do things the way we used to do it. And the customer's expectations, the people who buy from retail, they're changing. They have devices, I mean, from QR codes, shopping, comparative discounts, changing the game. I mean, Amazon's talking about drones delivering packages just in time delivery. Sunday delivery. It's just a complete radical. So how does IBM be nimble? How do they leverage their footprint? What do they need to do to be successful with the cloud powering the edge of the network to be smarter, faster, and more personalized? I think you can do a direct comparison from what the retailer needs to do to what IBM needs to do. So the retailer, a distributed operator, right? Stores all over the place. Perhaps they have e-commerce channels. They have other digital channels to market. They have to become more nimble, more agile. They have to think about the customer as the center of their world. It's no longer a product-driven organization. Therefore, they need to make investments to do more personalized, contextualized, localized interactions with each and every customer. So the customer is the center. Now, if you turn that around and say, well, so the retailer needs to be able to deliver from each and every employee within their organization more value that's nimble and agile than how do they do it? And I think if you look at some of the announcements they had today, I thought it was very interesting to hear about the Bluemix capability and the example they gave at the five-minute app builder. Right, exactly. Because that was a good retail example. Big retail organizations may have thousands of IT employees, but the vast majority may have a couple dozen. If you're operating in a world where the complexity of what you have to deliver in order to do business, in order to enable this rich, engaging customer experience has radically changed, then how do I deliver that? It's become so much more difficult to staff up and deliver all those capabilities. So where do you stand on Amazon as a retailer? I mean, are they the gold standard of the industry that everybody's trying to chase or do you look at them as a retail industry vet and say, well, obviously they innovate it, but there's a lot of other innovation going on that they're trying to catch up to. What do you stand on there? It's definitely not game over. Where I stand is everybody thinks of Amazon as somebody they need to chase. Every retailer has to consider Amazon as the formidable competitor. So you buy that? Yeah, I buy that. I buy that. But the thing is, it's not a foregone, there's not a foregone conclusion that Amazon is going to persist to be better. There's lots of projections about how fast they're going to grow and how they're going to chase Walmart in terms of billions of dollars of sales that they're going to do by 2020 and that sort of thing, that they're eventually going to catch Walmart. But there's a whole lot of room around delivering a rich, engaging experience that combines both physical and digital. There is huge value in the physical store. Customers like to shop, and it's not always about just kind of iterating on an order that you did before or something that you've already defined you need. Sometimes it's about going and exploring and touching and even talking to salespeople. Imagine that, talking to real people in stores about buying products. And those people in stores are now armed with digital capabilities that enable them to be as well-informed, if not better-informed than they're going to be going online to compare prices and that sort of thing. All right, so we're tight on time. I want to talk about Omni Channel. It's a term that you've been credited with coining. We use it all the time. I didn't know you coined it. So, John and I use it all the time on theCUBE. What is Omni Channel to you? What's the root of that term? So, Omni Channel basically describes the retailers drive towards serving the customer anytime, anywhere, anyway. So, what the retailer has to do from a technology perspective in an Omni Channel world is do more integration around all of the things they do across channels. Make better use of their assets. So, if I do content management for e-commerce, well, how am I delivering that into my physical channel to create richer experiences on digital signs and inside the store? How do I share that with employees inside my store? So, it's really a way of creating consistent experiences across all the ways that I touch the customer. Okay, so for a typical retailer, how many is Omni? It's obviously more than just online. Presuming it's more than two. Describe Omni Channel as Nirvana, if you will. Well, I mean, Omni as we describe it right now is really four channels, but that's loosely defined as physical store, online, mobile, which you might argue really isn't a separate channel. It's really e-commerce on a mobile device. And then catalog, the traditional catalog shopper, but all of that's coming together, right? It's becoming one, and that's the high point. Omni, it's one. So, regardless of how many channels anybody wants to define, you know, the customer only experiences you. The customer wants Omni Channel to be a unit channel. That's right, exactly, that's what it is. Omni's one. Okay, now how does Cloud play into this whole thing? I mean, you know, kind of back to Amazon, right? They disrupted the retail business. They disrupted the whole infrastructure business. Are those two worlds colliding together? What do you see there? So, in order for the retailer to be as agile, nimble, and to serve up this set of services that are in fact Omni Channel, you know, they need to figure out ways to drive cost out of the business. They need to figure out ways to engage the customer consistently. And traditionally, you know, they ran one set of systems inside the store, one set of system online. And then, you know, on the back end, from a business model perspective, they were also, they had separate people running both parts of their business. So, you know, that's just not sustainable long term. It's not competitive with Amazon, who, you know, runs at really low operating margins, but manages to sell more every year or grow more every year than traditional retailers are. Wow. Jeff Bezos has said that the AWS side of the business could be larger than the retail side of the business. Now, he didn't specify what he meant. Perhaps he meant profits. I don't know if you have a take on that. Well, you know, I think it's interesting because, I mean, yeah, sure, it very well could be. And it's certainly going to have better profits than is retail business, because the retail business has virtually Yeah, it has negative profits. It's a supply chain fulfillment operation and it runs on supply chain kind of numbers. Leslie, final question for you before we break is the role of big data on the channel, really, it's all about the data, understanding the minority report there. How do you look at that market? How do you frame it as a researcher? How do you affect it at a retail? What's your advice to your clients around? You know, honestly, it's no brainer. You got to deal with the big data, the data. How do you handle that? What's your, how do you frame it? What's your take on it? And what's your advice to your clients? Retailers have, the first thing a retailer will say to you is I have always had big data, right? I've always, it's, I've always had a ton of data. Part of the fence somewhere in the landfill. This is exactly the problem. The problem is I never really utilize it. So when we talk about big data, we're not, and analytics, we're not talking about how much data I can store. We're talking about how am I going to leverage this data better and how am I going to leverage different types of data, bring that together and serve up better customer experiences. We were in the big data STD event two weeks ago in Santa Clara and, you know, everyone's talking about the data lake. We like to call it data ocean. And people call it the data landfill. For that reason, they had the data that they never could use it. The compute was expensive. Data warehousing had structural things. It was so much of a hassle to get it out. They only got it out, but, but now in real time. Yeah. Changes the game a little bit. It does. What inning are we in in the game? Are we early, early days? Second inning, third inning, still? You know what, maybe it's third inning. You know, I think it is very early days, right? But, but a lot of retailers are very anxious and very interested in taking advantage of big data and making better use of the data they have. I think, I think that, you know, I don't talk to anyone who's resisting what they want to do. They might resist the term. Some of them don't like it. But, but they certainly want to move forward. And, and again, I think it's all about the integration of bringing these disparate bits of data together. And, and then the decision processes that you apply against that to actually automate and make your decisions, you know, more actionable. All right, Leslie Hand, research director at IDC Coin the Term Omni Channel. Great to have you in theCUBE, theCUBE. Actually getting all the big data and the big ideas here at IBM Pulse in Las Vegas, we'll be right back with our next guest after this break.