 The Cube at IBM Impact 2014 is brought to you by headline sponsor IBM. Here are your hosts, John Furrier and Paul Gillan. Paul Gillan back at Impact 2014 in Las Vegas with the Cube Silicon Angles flagship platform and we're exploring what's going on here at Impact 2014 where it's been all about cloud and mobile and data analytics. And with me is Steve Robinson, general manager of IBM Cloud Platform Services. This has to be a busy show for you because cloud has been in the centerpiece. They all seem busy these days, but yeah, great kickoff this morning, great crowd turnout, it's just been outstanding so far. Yeah, and the cloud platform is kind of the star of the show and let's talk about the new announcement this morning, the IBM Cloud Platform, the Cloud Exchange, Cloud Marketplace I should say, and how strategic that is to IBM developing its presence really as the foil to Amazon, if you will, then the cloud market. Well, I think as we were looking at the marketplace, we had taken quite a bit of a look at other app stores and we wanted to see if we could take it a bit further than just simply buying simple components out there. It's an enterprise store all the way across the board. We structured it so that we have components for the infrastructure of the operations manager. We have our whole SaaS portfolio for the business leaders themselves. And then of course, right in the middle, we have for the developer, we have our Bluemix platform and all the associated services around that as well. But more than just simply buying the component, we're also adding to it easier ways to discover, to be able to learn about the products themselves, demo capabilities, sample code, source code as well. So we're kind of trying to use it as an entire knowledge store so that customers can better learn about IBM's cloud strategy and hopefully apply that to their cloud strategy as well. We were talking with Sandy Carter a little bit earlier today and she was talking about the marketplace as really being a social phenomenon, as a whole social dimension to it. It's not just about what we think of marketplace as typically going download an app. It's about building on other people's work and combining different apps. Tell us how that works. Well, I think what you'll find is, it's a very broad reaching. So it'll go all the way from what you would find as a virtual infrastructure and software all the way up to Cognos, which is a very rich software as a service as well. But around the composable component piece, especially around the Bluemix part itself, we've started bringing in both IBM content and third-party content that really lets you construct and assemble some fairly sophisticated applications as well. The key with this one, we brought in some of the market leading services so you'll see your new relic, you'll see your Redis Labs, you'll see your MongoDB. And I think it'll be the first time that their communities can really see what IBM has to offer in this space as well. So if I want to license use of those modules, how does the licensing work on that? Yeah, in most cases with IBM, of course, with our components, you'll be able to download them and do a pay-as-you-go model. So when we go full commercial in the late June timeframe, you'll be actually go in there and swipe the credit card which is a little unique for IBM, but we're making the elephant dance to be able to do this as well. With most of the third-party services we have in the marketplace, we're allowing them free trial until, again, that late June timeframe as well, but we'll be able to do a transaction with them, pass the license back from them, so it'll all be clean on both sides. But really, I mean, is making money, the goal here at this point, you're trying to build mind-share, you're trying to get action. It's all about ecosystem, it's all about community, it's trying to bring the best parts there as well. I think the partners have been excited because it gives them exposure to a customer set they probably are not seeing from their independent site. On the flip side, I think it's going to give IBMers and enterprise developers on our side kind of some new view into some new, very talented software programmers as well that they may not have seen. So I think I'm kind of brokering communities at times, a matchmaking between the two. You mentioned SaaS apps. Now, IBM has some SaaS apps that you've built and acquired and then you're working with third-party SaaS apps as well? Definitely. Now, IBM's been on an acquisitional, I don't know if tears the right word, but over the past seven years, we've built out quite a substantial SaaS portfolio. You'll find Cognos, you'll see Sterling B2B, Konexa, BlueWorks Live. We've just picked up SilverPop a few weeks ago, a Spara that does the data movement for Netflix. So very rich portfolio. Now, these are full-sizes. Most of them, you can lay them into any size company and you're going to get value almost right out of the gate to them. You can do extensions to them, but you're primarily using them as they come. And then on the services side, on the composable services side, we've been adding the components around the BlueMix architecture itself to allow you to kind of start to build out what you could do with other PaaS environments as well. How long has the market been spying to BlueMix? You've had it just really a few weeks to begin to evangelize this. How has the market been spying? Yeah, we launched it at Pulse about eight weeks ago and it's just been unbelievable. We've already filled up our first data center. We're on to our second one right now. We're also speeding up the internationalization of that. So we're going to be following soft layers. They expand their pods out to have BlueMix with it as well. Based on Cloud Foundry, we predict today we're probably running the largest Cloud Foundry instance in the world with as much folks we have on top of it. So it's been outstanding. We've seen folks already rolling code into production only after a week or two. And in a lot of our major enterprise accounts, we already have pilots, hackathons, innovation activities going on with them as well. Is it fair to look at BlueMix as being kind of a successor to WebSphere or a cloud version of WebSphere? Some people do. I think if you look back to see what WebSphere did for IBM, it really became a backbone framework that all of our middleware could then flow and then run on top of. That was a very critical time for IBM and it really gave a boost to our overall middleware portfolio. We kind of view the same thing with BlueMix, where we're really regarding it as almost a new platform, new channel for IBM, and it's Plethora, a very advanced enterprise software as well. So you can see from pulse to what we announced today, we've already rounded out over 40 services within IBM and we have every single brand working actively to make sure that their components ride out on top of BlueMix. So are you saying essentially that all IBM apps will be BlueMix compatible or will be available through the cloud? Well maybe not apps, but we're using the technology and the capabilities to, we're doing a lot of work now to show the brands what makes a good service. So our big data components, we had those at the show this week for new pieces, Internet of Things. We announced Node Red so we could tie in some of our sensor and embedded engineering work with it as well. You see our DevOps from the rational side coming right in with IBM DevOps services. So right now every single brand has a team working on driving new content into BlueMix and we're going to continue to roll it out almost every month. So it's safe to say that any software I can buy from IBM on-premise at this point, the goal is to make that available through BlueMix? Well at least offer gates to it. So we announced today Cloud Connector and we also announced Cast Iron Live. So if I'm using DB2 or I'm using a transactional environment on the back end, we'll have services that allow you to bridge to that. But our expertise is data, it's analytics, it's transactional environments, et cetera. We will have service versions of those on BlueMix as well. It may not be the identical type because one's on-premise, system or record, but we want to take that expertise and expose that out through BlueMix so that we can build those system of engagements with it as well. And explain some of the benefits of using the software as a service. When you have the choice between a comparable on-premise or a cloud service, why would you choose to use the cloud service? I think what we're finding right now is it's all about speed. That most firms today are dealing with their traditional IT infrastructure that they have there and they have in-house. But for new pilot projects to reach new communities, to reach new customer bases, how fast can I get it out there? When I run on the paths, I don't have to worry about anything around infrastructure as well. As soon as I hit add application in BlueMix, it's running now on top of software. So all my energy can be spent now on the creativity of that application. You're reaching a new customer set with it, doing A-B testing that I couldn't do before, and I get almost immediate response back. For the cloud marketplace, now who is the core audience right now? Is it developers mainly? Is it commercial software developers? We've set it up as kind of three major categories. And if you go into the top level, it's IBM.com slash cloud, and then there'll be a marketplace tag there. So we've broken it into the operations manager. So they'll be able to go in and see all of the software components from bare metal servers to virtualized environments to virtual machine images, et cetera. You'll also see system management software. So the guy that's running the infrastructure, you'll see a full set of components for them as well. For the business user, we've segmented that by kind of the key roles in the organization. So you'll see for the chief marketing officer, for the CFO, the financial officer, even the legal team, you'll start to see us catalog the SAS properties that helps them do their job as well. So if I'm doing executive commission planning on a legal team, we have SAS properties for that as well. If I'm doing B2B with Sterling, there's SAS properties for that. And then the middle tier is for the developer. So the developer, we have the blue mix there, front and center. We have all the IBM pieces that cover data, that cover mobile, cover communication, cover infrastructure, and we have the third parties in there also. In terms of mixing and matching services from multiple providers, what guidance are you giving your partners to expose their services on a piecemeal basis so that I can combine a payment service from one company with an order fulfillment? We're doing a lot of education with them as well. And I think a lot of them are just getting pressure from the marketplace at the same time. What makes a good service? How do I start to break my larger application up into something that's composable? So we're helping them understand how to quickly get on board. Many of them will just take their SAS application and host it on software, then work with us a little bit to start doing, opening up some APIs to that and we can wrapper those APIs. And then I think the further step is actually starting to use some composable assets as well, where it's there, it's tightly bound with blue mix. And I can start using it as a jigsaw puzzle piece with other pieces to start to build out brand new applications. For companies, I'm speaking of your customers who were building using service-oriented architecture years ago. Is there a migration path for them to apply that to the cloud? Yeah, and I started back in the object-oriented days. So, you know, we had OO, we had SOA. These concepts have been out there for quite some time. I think the general concepts are good. Those that had done a lot of work around service-oriented architecture, the notion of service brokering, the ability of extending and binding those connectors, they all have kind of AB equivalents in kind of the new open cloud world. And I see a lot of these players have also been some of the early ones that have started providing the databases, the analytic packages, the Hadoop platforms, et cetera. So I think if a customer had been going down an SOA path, a lot of that architecture and approach is very transferable into this domain. How ultimately, give us your website says 200 days of blue mix. Yeah. You have a, is there a timeframe that we should look for six months from now, 12 months from now, and metrics that we should apply to decide has blue mix really been successful? Well, we look at it daily. I'll tell you that. It's a very hyper-competitive market right now. We're watching all our friends out there with regards to what they do. Part of what we're doing right now is community building. And can we build up tens of thousands of individuals running on blue mix, also getting footprints into our major accounts, also getting the major service providers up and going on the platform itself. We feel like we're being very successful on that as well. I think it's always the race to, can you get a major community built around you? And within a year or so, I think we'll have a very substantial community built up around blue mix that we can easily stand up across everyone else. Some of the other platforms have had a year or two to be out there, but we're tracking our progression compared to theirs, and we're extremely pleased with the acceleration that we're seeing. And how does this play to IBM's positioning of the hybrid cloud? I've been, clearly, your comeback against Amazon has been that hybrid clouds really are where the action is. How does this play to that message? Yeah, we're kind of using the term today at the show on dynamic cloud. And I think that's what firms are dealing with. You know, most firms are trying to deal with three basic architectures. They're traditional IT, they're private cloud, and how they're virtualizing that enterprise IT organization, and then the public cloud itself. In most cases, our customers have spent years and decades on highly valuable assets that they have in that traditional IT infrastructure. It's where my databases are. It's where my records of business are. It's where all of my, how I do my business, the processes are. Then how can I extend those safely out to the public cloud? And I think this is one of the areas that IBM will be able to do the best. How do I bridge? How do I do it safely? How do I handle the data protection with it? How do I really let me further amplify those assets out? It's nobody better. The enterprise software space is longer than all these guys combined, and if we can't get that one right, just take us out back. We gotta hit that one back. For WebSphere users in particular, what's the migration path look like? We've done some great stuff. You know, one of the most popular services we have within Bluemix is our Liberty Build Pack. And it's a Java-based Build Pack that connects directly into WebSphere. Most of them are picking that up and they're not even skipping a beat. They're actually taking existing applications and working directly with it. We also announced CloudConnection, both Cast Iron Live and CloudConnector, and this gives them direct access to their legacy environments. We have pre-built patterns for that as well. And also we have another application stack that is kind of below Bluemix. It's called our Pure Application Stack. And you can almost take existing WebSphere applications and infrastructure, host it directly on software itself, almost zero modification. And that's a great way to start playing around the public cloud with almost no modification to your code at all. You mentioned Pure and it reminds me of Pure Systems, which is sort of built for the cloud. Is there any particular advantage to Pure Systems customers, companies adopting Pure Systems because of that bridge to Bluemix? I think, you know, we kind of view it, where are they starting from today? So if they've been long-term users of IBM Middleware, they've got existing structures up, they've already got those pieces very well integrated. Pure is a fantastic way to take advantage of the virtualized infrastructure, et cetera. We talked to a few partners today that were doing a little bit of debate between Pure and Bluemix. And if they were starting fresh, you know, kind of becoming a fresh born-on-the-web type of thing, they're just going to Bluemix right away. And we'll start to build more bridges so that the patterns are a little bit more portable between the two, et cetera. So we'll offer several paths for them to get there. And in terms of the marketplace, what will the payment structure be like? How will that evolve over time? Don't be right now, everything is, the cost of it is very low. Very low, and we'll announce commercial terms probably in the late June timeframe. It'll look similar to what a lot of the marketplaces have, you know, be a percentage here and a percentage there as well. For Bluemix itself, what we're looking for is kind of a couple of steps. First, using the environment, I'll be able to swipe the credit card and do pay as you go. We'll kind of let you build up a bill of material around the application that you have. We'll also offer subscription-based services, so for, just like your cell phone bill, for a fixed cost, X amount a month, you'll be able to use this much capacity as well. And then, of course, we'll also offer for those firms that fully standardize on it, ability to wrap with that into their enterprise license and to their big traditional contracts with IBM. Are there any special programs for business partners to move their development operations to the cloud? We're doing three things, and I think what we're looking for are those that are already on software, that's a very prime target space that we're looking for. And you'll see a lot of the, some of the most popular services out there are already on software, so you'll see Cloudant already out there, you'll see Redis Lab already on software, you'll see Syngrid, so those are very easy ads to the marketplace itself. Many of them we're working with right now is how do we quickly get connected with Bluemix, so you'll see folks like Zend who have had virtual images that are now gonna be working on making Bluemix components out of that as well. And then the final group that we're working on are those that have been working with our large SaaS portfolio, such as our Cognos, our Sterling, et cetera, and they're part of that ecosystem, so that's another group that we want to pull into the marketplace as well. And IBM has been on a major campaign to convince its business partners to move to an MSP, a managed service provider model. Is this part of that mix? I would view that kind of a little bit below. We do have a very vibrant MSP program with an IBM, which is more of a combination of services with software. We use it quite a bit, say, with our security. We run a security operation centers for many, many accounts, and we have a lot of partner software in there that we run on a seven by 24 basis as well. The marketplace itself we're looking for more freestanding software, so this would be something that they could use to utilize, now whether they use IBM services or their own, their choice. Steve, we'll give you the last word on this. For those who are doubting that IBM is all in on the cloud, what do these announcements say to them? Well, I think what you're seeing is kind of the third step in a very serious progression. It was only about nine months ago when we picked up SoftLayer, and that gave us a rock solid, tremendous infrastructure. We followed that quickly with about another billion dollar spend around the BlueMix launch and the services associated with that. We just announced another expansion of SoftLayer to 40 data centers, and then you see today kind of more of the marketplace being launched, which really builds out our ecosystem, and then the additional services on BlueMix. We are all in, the chairman's fully behind us, and you see the momentum is unlike anything I've ever seen in my career at IBM. And certainly SoftLayer emerging as the jewel in the crowd for IBM's cloud strategy. Steve Robinson, thank you very much for joining us today. As you can see, the cloud is the theme here at Impact 2014, some big announcements, and IBM making it very clear that this is something that the whole company is behind. We'll be right back after a short break with our next guest.