 From Las Vegas, extracting the signal from the noise. It's theCUBE, covering Interconnect 2016. Brought to you by IBM. Now your host, John Furrier and Dave Vellante. Hey, welcome back everyone. We are here live in Las Vegas. This is Silicon Angles, the CUBE start flagship program. We go out to the events and extract the signal from the noise. I'm John Furrier with my co-host, Dave Vellante. Our next guest is Jamie Thomas, General Manager of Strategy and Development for IBM. CUBE alumni, welcome back. Great to see you. It's great to see you guys, as usual. It's fun, fun times. Okay, last time we spoke, we talked about storage. Now you're in general edge of systems and development, which is all across the different systems groups. A lot of exciting stuff happening. We've seen the cloud, the middleware stuff. We've seen all that change and over enabled. But there's still some stuff that's kind of out there that's driving a lot of innovation. Besides the developer community we heard about from Apple, there's Linux, these blockchain being open source. You're starting to see the power of the IBM systems starting to get more open. Okay, is that part of the strategy and how do you guys tie that into the older stuff? Well, absolutely open is a critical part of this systems infrastructure transformation that we've undertaken over the last number of years, but particularly in the last year, if you look at some of the announcements we made and the changes we made, we opened up power to create a vibrant ecosystem around the power architecture, over 200 members now. And we, at the end of the year, we announced a Linux class machines for the power platform. Another announcement we made last year, in addition to the Z13, was just this all Linux mainframe called Linux One. In the area of storage, we announced a new storage family for software defined storage last year, IBM Spectrum. Definitely tied in to the open agenda. So that is definitely a critical part of our strategy as we embark on allowing our clients to succeed on this cognitive journey. So Brian Kroll was on stage from Apple this morning, and he said, it's a pretty interesting thing, so we love Apple, great success, great partnership that IBM has, and I think that's going to be a secret weapon, in my opinion, down the road, as we can kind of most connect the dots, which we will do a little bit later in the interview. But he said something really powerful, which is, obviously it's their agenda. Take advantage of the hardware. Yeah, okay, exactly. That is interesting, because in a way the X86 business, IBM has kind of gotten out of that, that's the Intel side of it, but you got the power, you mentioned power, you still have other systems. What does that new equation mean when they say take advantage of the hardware now? Does that mean kind of conceptually, or can you be specific? What do you guys, do you agree with that statement, and what are you guys doing? Well, absolutely. I think it was an interesting statement from Apple, and also Robert mentioned this in his keynote today, that really it's not about, cloud is not a destination, it's about taking advantage of what you can do on the cloud, but making sure that you've also taken advantage of the investments you've already made. So if we look at the mainframe for an example, more than 80% of the world's transactions still require mainframe. And think about the transactional increase that mobile is driving to these backend systems. We have to make sure that we have the right capabilities there from a security model perspective, from a development experience perspective to allow our clients to take advantage of mobile, take advantage of the cloud, but still take advantage of that transactional system that they've built over years. But so that's a composable, I'll use the word composable, might not be in the messaging this year, but that is a big DevOps trend, composable infrastructure, and end to end. In other words, it's not end to end fixed. Yeah, right. You're essentially suggesting that's a mobile to edge to core, if you will. Exactly. But it has to be composable, it's not a fixed end to end. It has to be composable. And so that's why the announcements we made this week and last week around how we take advantage of IBM's API Connect, how we allow developers more easily construct API services-based applications, but then, once again, allow our mainframe services that allow you to tie into those transaction systems to be discoverable as well, take advantage of this. And the other good example is what we've done around the Power 8 architecture. With the change in that architecture, it really is a cognitive hardware platform, allowing clients to really consume big data and analyze that data to be more effective in their business. And that is really a purpose fit environment for big data and analytics, if you will. So a great example of what we were talking about this morning. Cognition. Yes. If Watson was on the Cube, we asked Nancy Pearson, what would Watson say about John and Dave? Oh, well, he would love you guys, of course. John said, well, John had a rough night last night, I could tell by his tone. So, Jamie, I wonder if we could talk about the business and what's driving the business today and in midterm and longer term. So, we were at the Z announcement a year ago, January. And you remember, John, we talked about product cycle. I mean, we're going to have a massive Q4 with Z. We talked to a lot of customers at that event. It was Jazz at Lincoln Center. Fantastic event that Tian Newman put together. He didn't hang around to take all the credit. He went to IoT in England. But at any rate, great Q4. We talked to some customers who said, I'm going to buy four or five of these things, sight unseen. So, you had huge pent-up demand for that. So, you have a product cycle that hit. So, that drove a lot of business in the systems group. Power, bounce back, showed high single digit growth rates. So, you got some product cycle things going on, some transformations. So, talk about that, but what are the big trends that you see that are powering your business in the future? Well, I mean, we're clearly, as we go into this year, we're still taking advantage of the major sea change we made in these hardware platforms and storage last year, right? There's still, a lot of our clients still have room to upgrade to take advantage of these new capabilities. And we mentioned Linux earlier, right? There's some fundamentally new things that we've done, both on power and the mainframe from Linux perspective that we think our clients have yet to tap into. And so, there's a lot to be seen on that horizon. And I think that plays very well to a lot of the open conversation we've been having here this week at the conference. Of course, there was a great open summit on Sunday where all the various projects came together that are involved in that, working with IBM. I think as we go forward, we believe we've set ourselves on a strong transformational journey. Once again, allowing the new age environments, whether that, we want to talk about that as the mobile front end or the big data front end to take advantage of these systems and what they do very, very well, making sure that our clients can attain a true cognitive computing environment to allow them to be successful and take advantage of those new capabilities. Just a note for the folks, you mentioned the weekend. It was a hashtag IBM OTS, that's open technology. I've got the S stands for, but all the top developers really working on some of the in the weeds, guts of technology, check it out over the weekend. Given that kind of segue to that point, Blockchain open source is huge news. I mean, certainly, people in the industry and the infrastructure say, okay, that's Blockchain, it's really going to change the game on democratization of transactional stuff. What's your thoughts? I'll see it's a systems issue. How does that cut across strategy? Well, I think Blockchain is very important for us that own the next generation of infrastructure. I think that our interest is rooted in where a lot of the transaction and data reside today. And so clearly from that perspective, our systems handle a lot of those transactions and data. And so we need to be a first class participant and we plan to be in terms of the Blockchain evolution. We believe that we have some unique security elements that certainly exist today on the mainframe and we're further enhancing that will allow clients to have peace of mind as they enter into this bold new world of Blockchain. We have some very good demonstrations that are available here at the conference of how these systems can participate in the world of Blockchain. And I think that would be instructive for those clients and partners who have time to go see this week. And you guys were very much involved in the Apache project and the sort of new open source Blockchain. Different than the Blockchain we know at Bitcoin, right? And you're like presumed of the mind that one Blockchain is not going to rule them all. That's an idea in this approach. Clearly, as we discussed earlier this week, there's just all kinds of advantages for this type of open ledger philosophy. The one demonstration that we've been showing is really an import-export demonstration where there's a shipping ecosystem, if you will, that can take advantage of Blockchain. A very fundamentally difficult problem if you're in logistics operations is really how do you share and have the right interchange format across all the different members of the ecosystem to be more effective? I mean, federating identity is another issue. You're seeing all these things exploding. I want to ask you a question. I know you're always candid on theCUBE. We really appreciate that. The color and commentary and sharing of some transparency rather than IBM. But I want to ask a philosophical question to you about what's going on inside IBM because IBM has been a real leader in open source over the years. You go back to the beginning of the web. IBM has been a first class participant in all aspects of open source. So the question is, is there internal conversations where people say, hey, you know, we did great stuff back then, but if we had a mulligan, can we do things a little bit differently or if I had to redo? And looking at today's open source, as you guys are now continuing to invest, do you guys look back at your history of open source and saying, hey, would we tweak it a little bit differently? Is there a conversation where you have some learnings from those years and how you're executing open source today? Oh, absolutely. I think any time you've been involved in an endeavor for this long, you do have things that you understand that you did well and things that you didn't do as well. One thing we definitely have learned is that we need to be involved early on. So you can wait too long to get involved in certain open source efforts, and then at that point, you really have lost a critical ability to impact them or to have input into the early evolution of these open source initiatives. So that's why you see us jumping in fairly early with things like blockchain. We've certainly been very involved in Spark. I know my teams have really embraced Spark and we've gotten some good advantages out of what we've been able to implement today. Docker containers is another good example of a keen focus for us. We also understand that for IBM to be effective in these open source projects, we need to have critical mass around them. So there's been open source efforts we've participated in in the past where we did not have enough critical mass, and that usually means we're just not fundamentally at the table. So you have to decide which projects you want to be at the table at, and then you have to make an investment because we IBM want to have contributors and to be involved. So for your group, what are those, what's the seats for you at the table? So obviously Linux. Can you just go through the systems piece? What are the key projects? Some of the key projects, I talked about already the IBM project around open power. I mean, that's fundamentally important. The other projects that we've been involved for a very long time is Linux. So we have a core Linux team in my organization. That's a way of life for us now. And Linux kernel's changing significantly. We're absolutely very involved with a number of the distribution vendors out there in the industry. Spark is very critical for us going forward as well as Docker containers. A lot of our software takes advantage of virtualized environments or bare metal environments and also now supports container environments. So being able to support this heterogeneous type of capability is really important to us. So talk more about Spark. We were at Spark Summit last week and hanging out with the data scientists and all the geeks. Yeah, I saw that. I saw your geeks. I said I was the only person with a tie on there. So I feel much more at home here. But so another big theme last year, we heard from IBM on the Z side is bringing analytics and transactions together and doing things in near real time to affect business outcomes. Sounds a lot like Spark. So what's the Spark play? I mean, we have Rob Thomas on. He sort of gives it his perspective. What's the play from the systems division? Well, clearly in terms of some of the things we already do today around compute optimization, we have a capability called platform computing, which is able to optimize a number of different workloads to do HPC in-house analytics, but also Spark is a critical element of that. So we announced support for Spark last year and it's been made available so that we can optimize Spark environments. We continue the evolution of intelligent analytics on our platforms in general. Like the mainframe just last week, we announced the fact that we can now apply the data that's available in the mainframe environments more intelligently married with our security organizations capabilities to prevent cyber attacks. So that is just a specialized form of analytics if you will on the platform. So what are you seeing as the big business impacts that these big trends are driving for your customers? Maybe you could add some color around that. Well, I think that I would put them into several different categories. This data explosion that we keep talking about is definitely driving a couple of trends. One is with this much data, you have to have an effective way to get inside out of it. And that then leads us on the journey to cognitive. The other problem that it presents is just sheer economics. How do you economically deal with this much data and effectively manage it? And that leads us, in my view, to understanding hybrid cloud more fully. We have to understand how to really put a hybrid architecture in place to deal with this phenomenon. And those are two of the big things we're talking about. And then the other thing we just talked about, I think quite a bit, is open. None of this is gonna happen by a single vendor by themselves as evidenced by all the partnerships we've talked about here today with the VMware, with Apple, with many others. It really is gonna involve a collaboration across a number of key vendors to make our clients successful and leveraging the communities that are out there. How would you describe your strategy as it pertains to hybrid? Summarize IBM's approach. IBM's approach is that we have a great appreciation, of course, for what clients have invested in on-premise. And so our goal is, while we understand that they definitely want to take advantage of the cloud capabilities, the flexibility of the cloud, we also are fundamentally invested in allowing them to take advantage of the investments they made over decades. And that we enable them to take those investments and move them forward in a way that benefits them because we're here for the long-term and we're not here just for the next decade. And you partner well to the VMware 14-year relationship. That was front and center, solid, keeps the base happy. Nothing's gonna radically happen overnight. Okay, final thoughts. What's your vibe prediction so far? Day one, I know it's day one a little early, but for the folks watching at home, what's the vibe for Interconnect this year? I think the feedback I'm getting from the clients is that they really appreciate the partnerships that we've brought forward today and we demonstrated that we're creating an ecosystem that will help them be successful. That we're also demonstrating that we're a long-term partner and that we're a partner that you can count on as you make a journey that, in some cases, is not easy for some of the existing clients. It may be easy for the startups that were born on the cloud, but for a lot of the clients, it's a journey. And we're here to help them on that journey. Jamie Thomas, General Manager of Strategy and Systems, Technology Development. You're watching theCUBE. We've got some big guests this afternoon. We have the Weather Channel, weather data coming on. We're talking about all that new stuff coming in on the acquisition. We've got a lot of big guests talking cloud. This is theCUBE bringing the cognitive mojo here on theCUBE, cognition. We got it on. Jamie Thomas here inside theCUBE. Thanks so much for spending the time with us. We'll be right back with more after this short break. Live in Las Vegas, I'm John Furrier with Dave Vellante.