 Live from San Diego, California, it's theCUBE. Covering Cisco Live US 2019. Brought to you by Cisco and its ecosystem partners. Welcome back to theCUBE, day two of our coverage of Cisco Live, we are live also from San Diego. I'm Lisa Martin, Stu Miniman is my co-host and one of our alumni is back with us, Eric Herzog, the CMO of IBM Storage. Great, thank you for having us. Welcome back. So, lots of buzz, we're in the DevNet zone. This has been, I hear one of the busiest expos at Cisco Live this year. The community is, I'm hearing, approaching 600,000 strong. Yesterday we were talking a lot about the big waves of innovation, one of them being GPUs everywhere, AI, but also some of the challenges with respect to data that companies are generally getting less than 1% of that data to really extract insights from it. So let's talk about what IBM is doing with respect to AI and big data and really helping customers really tune that dial up on getting more value out of what they have. Well, so we're doing a lot in that space. First of all, when you're running AI in particular, if you're really going to do something like run robotic factory, you better make sure the storage doesn't fail. But that's sort of the checkbox item, just the way a car always has a spare tire. So the real differentiator from a storage perspective is what do you need to help the data prep? What do you help to do to make sure that the data is always in the right kind of pipeline? For example, just like a human always learns, right, smart humans always learn. So you learn certain things when you're seven or eight. They might have changed by the time you're in college. By the time you have your first kid, they might be different again. And by the time you're getting ready to retire, but it could be still the same topic and the data is recycling and then you learn new things about that topic. So in the case of a data workload, what you need to do is make sure you have data prep along the entire pipeline. And that's what we've done with a whole bunch of software that we offer for the big data and AI workloads and applications. All right, so Eric, we've talked with you many times about what's happening in kind of a multi-cloud world. It feels like IBM and Cisco are on similar parallel paths as to the move from traditionally we think about boxes and from a Cisco standpoint, it's ports and more and more it's about the software. So talk a little bit about that software defined world and where IBM and Cisco are going together along that journey. So one of the things that we've done from a storage division in perspective, we do what we call the VersaStack. It's a converged infrastructure that includes Cisco, UCS, our all flash arrays, but it's packed with a bunch of software. So we can use that to transparently move block data out to a cloud, any cloud, IBM cloud, Amazon, Azure, we can move it out to a block store or to an object store. Now obviously move out to an object store that can help you can prevent ransomware and malware. And it's all automated. We've done the same thing with scale out file where we just see cloud is just a tier and we've done the same thing with object storage. So the big thing we see from a hybrid multi-cloud perspective at the IBM storage division is everything needs to be able to have the data easily portable, easily migratable and easily replicable and constantly moving back and forth, not just going out to the cloud and staying there. So we've done that from our software defined portfolio, but we've also done it with our Martin Data Protection portfolio, Spectrum Protect, which is one of the most award winning products in the backup space. We've got over 400 small medium cloud providers where their backup as a service offering is based on Spectrum Protect. So if they go to Wikibon and Wikibon says we want to back up to the cloud and you're using tech trade or cloud temple or I virtualize all those cloud providers, the backup as a service they sell you is based on IBM Spectrum Protect. So for us cloud is just another tier, just like hard drives and flash and tape, cloud is just the new tier. So in this pivot towards software defined everything with say VersaStack for example, give us one of your favorite customer success stories that really highlights the value of what IBM and your partnerships deliver. Sure, so one of them would be tech trade. So tech trade is one of our public references. They only do PCI data. So Wikibon couldn't be a customer, IBM can't be a customer, theCUBE can't be a customer, Cisco can't be because we don't specialize as you know in financial centric data. So they back up about, they do about two million backups a day, all of financial data across Europe and into North America. And they've got a VersaStack that happens to run Spectrum Protect on it. It's all flash so they're not worried about performance and then they back up to giant hard drive farms that they've also bought from IBM. But the real thing on the VersaStack is having that very fast edge and then having the software that allows them to a control the storage side but then run Spectrum Protect to do backup. So if you were a bank, if theCUBE was a bank, then you guys could use tech trade and they use a VersaStack for backing up data as a service. That's a perfect example of what we've done with the VersaStack solution in this case in a hybrid cloud scenario. What are some of the business impacts that they have achieved so far? Like are they finding new revenue streams? Are they unlocking more valuable data to be more competitive? Well so what they do is obviously in the PCI world they're very centric, you can't lose anything for the financial data. So for them it's all about the security of the data, making sure the data gets there, the data's encrypted in flight. They know that the customers can do a lot of different things because Spectrum Tech is very much a big enterprise package that's very strong in the global fortune 2000. So they like it for that. Now we've had some other customers and there the value has been things like the return on investment. For example, the second largest dating site on the planet uses VersaStack and they got a four month return on investment. They bought it and in four months they paid for themselves, they bought like four or five more. We had another customer who saved, and this is also a cloud service provider by the way. So they saved the equivalent of five full-time employees that were writing custom code and managing stuff and they used Spectrum Protect also for back, but in this case you and I could use them because they're not specialists like tech traders and they'll back up anybody's data and they saved five full-time equivalents so they've now redeployed those full-time employees to do something else. So those are just examples from three different companies of ways that they've saved money and been really driven of business value, not just about the data and yeah, the data's fast, but really if you're a storage guy, been doing as long as I have, the data is always fast and it just gets faster every generation. Okay, it's fast, right? And in this case it's really about business value, about the value of the data, not about the storage. All right, Eric, you mentioned security. Of course, security is one of those topics that's hitting all lots of environments here at Cisco, but bring us inside, especially from a storage vision, modern data protection and how that's getting involved in the security discussion. Sure, so what we've done across the portfolio, even in primary storage, is made sure that we've done all sorts of things that help you against a ransomware malware attack, keep the data encrypted. I think the key point actually, I think SiliconANGLE wrote about this, is something like 98% of all enterprise are getting it broken into anyway. So it's great that you've got security software on the edge, whether that be IBM or RSA or BlueCode or Checkpoint, or who cares who you buy the software from, but when they're in, they're stealing. And sometimes some accounts have told us they can track them down in a day, but if you're a giant global Fortune 500 with data centers, it may take you like a week. So it can be stealing stuff right and left. So we've done everything from, we have right once technology, right? So it's immutable data, you can't change it. We've got encryption, so if they steal it, guess what, they can't use it. But the other thing we've done is real protection against ransomware and malware. So I am going to attack Wikibon the queue and I am going to charge you $10 million. And I'm going to steal every video I've ever created and hold it for ransom. So the way I would do that is I look at your snapshots, your replicas, and your backups first. So what do we do? We can actually snapshot a replica out to an object store and ransomware and malware, at least today, doesn't attack object storage. So that way, when I'm talking to you or Stu and said, I want $10 million, you start laughing, I go, wow, we replicate every night, okay, we lose one day of data, he can't get up to $10 million. So that's ransomware or malware protection. We've also built that into Spectrum Protect because what happens is when you're starting to, if you will, look at that data to get it wrapped up in the ransomware or malware, you have a whole bunch of extra activity around the backup data sets, so we send an alert. So we send an alert to you, Lisa, and you would say, oh my God, what's going on? Why is all this activity going on the backup set? Because the backup's not scheduled, let's say, for tonight. And we would send you a note now at two o'clock that there's all kinds of activity and you would go, what is going on and you'd check it out. So we can help with ransomware and malware, encryption on primary data. So we've really integrated across the portfolio, whether it be primary storage or secondary storage. And by the way, almost nobody thinks about storage. They always say, whose securities package should I buy? And they never say, okay, I'm going to buy that, but I might buy some security for the storage to no one ever talks like that, which is why we're bringing it up. And we actually launched a sales play for the field all around storage for cyber resiliency. And how's that going, if you're saying it? It's actually gone incredibly well. We started with a product called Safeguard Copy on the mainframe, and we actually got, in the first four months, almost $60 million of pipeline in the first four months of the product shipping. And now we've got it all over the whole portfolio. So we tried it just when we first got started, and now we're now talking about the ransomware and malware stuff, which by the way, we've had for three years, but we never were emphasizing it to the end users. Never saying, by the way, has it happened? Are you worried about it? Well, guess what? If you're backing up a spectrum tech, we'll warn you. Why don't you go out to tape an air gap? Or why don't you go out to the cloud and we can do essentially a cloud air gap to Object Store? And we weren't really talking like that until really, we started doing it in Q4 and then really expand it in Q1. So it's been very, very successful. The end users love it. Our business partners who sell the end users, they're loving it. And by the way, no one else is really talking about it. It's all about the security software company. So we're going beyond that. Yeah, so Eric, you talked about some of the products when, with Cisco and IBM working together. I wonder if you can up level a little bit. You know, you're a great watcher of the industry out there. Chuck Robbins now four years into his tenure as CEO. Wall Street's doing well with the stock on there. Finances look well. You know, IBM and Cisco, two of the bellwethers in tech out there. How's Cisco doing? When you talk to your customers, what are they liking about Cisco? What do they want to see more from Cisco? Are they aware of the transformation that Cisco's going through with just? Well, I think there's a couple things. First of all, IBM and Cisco have a mutual relationship that spans billions of dollars. Whether that be, for example, as they publicly have disclosed, IBM is the biggest customer for WebEx on the planet. And they talked about that, okay? There's products that we sell to them that they're one of our biggest customers in the world as well. But then beyond that, whether it's common end users or common channel partners, we make sure that we deliver the right solutions together. So I think the feedback I get from both the end users and the partners at Cisco's back, right when Chuck came in, oh, what's going on with Cisco? They're still big, but the big sometimes fall over big, right? Like in, you know, the beanstalk. The giant falls over, right? So that's what I think people were thinking four years ago. I don't think people are thinking that now. From our perspective, we've always kept working tightly with them between our relationship with them as a customer and us as their customer. But more importantly, it's really the common customers we have in the common channel partners. And we've never wavered for that support from a Cisco perspective. But just sort of off the cuff when people make a comment, it's like, hey, those Cisco guys are back. And four years ago people were saying, what do you think about Cisco? You know, and my wife works at Cisco and my ex-wife works at Cisco. So, you know, it's a little easier for them to ask me that because I'm a Cisco shareholder too. So, but now you don't hear that question. It's like Cisco's got their act together. They're doing all the right stuff. So that's very good for me personally with my stock, but it's also good just for the industry. You know, you don't want, you know, someone to not be able to make the transition. And the valley's little with that deck. All compact, they're all gone, right? They're not the only guys that are gone. So, you know, Cisco's not going to go the way of other big companies have. They've made the transition and are transferring to what the end users really need. And I think the DevNet community growth is a great art. You know, it speaks to the pivot that Cisco's making. DevNet has been in large part an accelerator of Cisco's transition from network appliance provider to more of a software services provider, but that community symbiosis with their end user customers, with their partners and with the developer community is really a driving force here. And I think just being in this DevNet zone and how big it is is a great example of how they're leveraging that those other feedback channels to not just persist, but be successful. So here we are, their Q3 2019 results were really strong. We're at the cross, all three business segments. We're in the middle of their fourth quarter. So for Cisco's FY 2020, what are some of the big bets that you can share with us that IBM and Cisco will be working on? Well, the one we've done together has been one on security. So we have joint security products that we've done. We have the joint product on the system side with the versus stack. We've done joint products with them also in the cloud solution area, both if you think about hybrid cloud, but also in private cloud. So IBM cloud private, for example, is available on their HCI box, right? So their hyper-converged infrastructure solution includes an option for IBM cloud private. So IBM has made many bets with them in the security space and the cloud space. Also, by the way, one of the biggest providers of service on Cisco solutions is actually IBM. So our services divisions do tons of business with Cisco without servicing the physical gear or servicing the software. And we've been doing that for years. So whether it be service, whether it be cloud, whether it be infrastructure, IBM is doing joint solutions across the board with the Cisco community. Going to ask you one last question, Eric. You've been in this industry a long time. You're a veteran extraordinaire. What keeps you excited about storage? Storage always change. Storage is not boring. Storage is boring for the uneducated. It is the most exciting thing. It changes all the time. I remember one of the good things about IBM was not like just an array company where we only don't do backup software. We've got high-end storage arrays. We still do tape. We're by far the dominant player and we're having a huge resurgence there with hyperscalers and cloud providers. We're going crazy with tape because for them, they're all about saving money, right? For backup and archive and we're critical to that. We are the number two storage software company in the world. All of our software works off of our gear. Some of the other guys that sell lots of software, yeah, they sell lots, but it only works on their products. Our software works with all of our competitors products. So that makes everything exciting. And I've done this now for 35 years. So I've seen hard drives that were the size of a dishwasher to now flash that fits into your phone, right? Or my MacBook, I've got five terabytes of flash. So, you know, to me, that's all exciting. And the software is where it really matters. And you know, we've gone from bare metal to virtualization, now to containers and cloud. So there's always new stuff going on, but I really think part of the problem with storage is everybody takes it for granted and doesn't realize if your storage doesn't work, isn't performant, isn't reliable, and isn't available. Basically your entire infrastructure caves in. I don't care whether you're in the cloud, whether in a virtual world, or you're still doing it really old hat with bare metal. The storage doesn't work. You're shutting down your company until that storage is back up and running again. So it is the critical foundation for every application workload and use case in any company, big, medium, or small. And it always, always evolving. So to me, it's very excited, although some people think storage is boring. I'd say networking is boring. That to me is boring. Storage is exciting. Don't say that too loud here. That's true. Well Eric, it's been a pleasure to have you back on theCUBE once again. We very much appreciate your time. Great, well thank you for having us. Our pleasure. Of course Stu Miniman, I'm Lisa Martin. You're watching theCUBE Live from Cisco Live in San Diego.