 Live from Las Vegas, Nevada, it's the Cube at IBM Edge 2014. Brought to you by IBM. Now here are your hosts, John Furrier and Dave Vellante. Hey, welcome back everyone here live in Las Vegas for IBM Edge. This is the Cube, our flagship program. We go out to the events, extract the signal from the noise. I'm John Furrier, the founder of SiliconANGLE. My co-host, Dave Vellante, co-founder of wikibond.org. Great to have back on the guests for, again, multiple times, Cube alumni, Sebastian Krauss, VP of Global Storage Sales. His title gets bigger every year, always entertaining. Welcome back. Thank you very much, I really appreciate it. I think that was your same title last year, Global in it last year. Yeah, it's true, it is true. So tell the folks real quick while we're here, what's going on with Edge? Infrastructure's back, did it ever go away? Obviously the Lenovo deals impacting certainly on the X86 smooth sailing from what we're hearing. What's going on with storage and everything else? Well, to your point, infrastructure matters and it was never gone away, right? It might have been somehow a little bit hidden in the cloud, so to speak, and all this topic, but I think now everyone in the entire market is realizing how important the infrastructure is for cloud analytic mobile social workloads. So from that perspective, infrastructure matters a key theme for Edge 2014, providing our solutions here, telling our clients what we have done in this area, so we're really excited to have more than 4,000 customers joining us. Sebastian, one of the things that we're hearing in the cube earlier today and then yesterday and throughout the industry, all the events that we've been to is this new era of the infrastructure is upon us. It's a modern era that kind of used a baseball analogy, you know, a lot of new performance enhancement capabilities like virtualization, flash, obviously all kinds of different levels of performance, tiered performance, all kinds of stuff. Okay, so with that in mind, one of the things that we're seeing that's kind of a new trend we're teasing out is this movement back to building large scale infrastructure. Systems guys are back, not the coders, young guns, banging out applications, they got their glory, you know, WhatsApp, 19 billion dollars, consumerization of IT, done deal, that's happening. But the builders, the infrastructure guys, hyper scale in the enterprise, guys building large scale systems in a modern way. Do you agree with that? And if so, what do you see some of the successes? I absolutely agree with that, John. And I believe it's because we are seeing two trends in the marketplace happening right now, right? We still have the traditional systems of records that we all know from the last couple of decades. But then we see these systems of engagement basically arising with all the mobile and social technologies that everyone is using right now. But I think the big difference is that now clients more than ever before are seeing this as a competitive advantage for them if they can use those kind of technologies. And the key to success for them is to combine the systems of engagement and the traditional systems of records together. And as you said, they need to have a foundation that is scaling because all of the data that is coming in somehow needs to be managed but most importantly needs to be analyzed, right? So how's that play out? Do they reach some kind of equilibrium where the systems of record and systems of engagement sort of morph together? There's certainly pressures of new systems of engagement that say, oh, we don't want that old systems of record baggage, but the real question I have is from an infrastructure perspective, how does the infrastructure change to support that hybrid approach? I think the infrastructure needs to be much more flexible and open than it has been in the past just because of the different workloads that are coming in, the different applications that are being used. And so the infrastructure needs to be a reflection of what the workload is. And that's what we are working on, providing elastic storage, providing the capabilities to have large-scale implementations but also to be a tight to the application, tight to what the workload basically needs to be fast-running, reliable, secure, and so forth. It's interesting, it sounds cloud-like. It is. John and I were talking, Sebastian, maybe four or five years ago when you talked cloud to IT practitioners, they'd roll their eyes, but that's really changed. It's notable. You guys use the term elastic. EMC would redefine Amazon's and their elastic storage too. Right, their elastic storage, right? So the markets become conditioned to these terms, hasn't it? Talk about that a little bit, why the change? I think because of cloud as a delivery mechanism, so to speak, for applications and for workloads, whether it's on-premise, whether it's off-premise, whether it's a hybrid infrastructure is so important for today's environment, especially given the new workloads and the new collaboration that we are seeing in the marketplace and the different ways of engaging customers, engaging clients, whether this is an end customer or whether these are the intermediaries, so to speak. So I wonder if we could talk a little bit about the products, the portfolio. We haven't spent much time, actually, usually in the queue we're talking about products all the time, right John? But we haven't spent a lot of time. We've been talking about business value and we've had a lot of customers on talking about their transformations. This is the first edge that I can recall. This is the first time in a long time that I can recall where IBM's refreshing its entire portfolio top to bottom all at once, coinciding with Edge. But I can't think of another time that I've seen this. Well, as you know, David, we are bringing our products every single quarter, right? But I would call it the firework that we have just seen in the last six months from what we have announced. In fourth quarter, we started with a refresh on the DS8870 family. We have announced the new flash systems, 840 in January, that was followed by the V840 flash systems with the virtualization capabilities in February. Now at this edge, we are announcing the complete remake, generation two of the store-wise V7000, which enhanced performance, enhanced compression capabilities, and from my perspective, a reliability that is just mind-boggling. We have also announced the eighth generation now of SVC, the IBM Sand Volume Controller, our data virtualization engine. And last but certainly not least, based on our paradigm that we will bring fresh flash in all of our platforms, we have also announced the high-performance DS8870, where you now have the flash enclosers directly connected to the host controller for superior performance, but still having all the reliability and security that the DS8000 platform is going to bring. Tell me, why does a customer buy an SVC, and not say a V7000, just doesn't necessarily want the storage going along with it? He can save money doing the SVC? Talk about that a little bit. No, it is really about the use case that customers are having. So let's say a customer is having already an infrastructure and does not have any capacity needs at this point in time, but they want to drive a different utilization. They would be going down the SVC path, right? Introducing virtualization, leveraging the capability of SVC that we would be able to include more than 260 storage arrays from all the vendors out in the industry. So that's a significant capability. If you want to go more down the capacity path and you still want to have all the capabilities that the virtualization layer would provide, you would definitely go with the store-wise platform. I understand that we've been tied up with the cubes and we haven't been able to attend, but I understand that the SDS, the software-defined storage and elastic storage breakout sessions are packed, very hard to get in. What are customers telling you about the announcement of elastic storage and IBM's direction that you've laid down on software-defined? I have been talking to customers for the last four weeks in anticipation of this announcement, so I was talking to them one-on-one, and there is not a single customer that would not be overly excited about our announcement, about our vision, where we would be going in bringing the different data sources together in scaling across the entire platform and providing them those kind of capabilities. So tremendous momentum that is being built at this point in time around the announcement about our vision. How do you, when you talk to customers, how do you differentiate from others? Because everybody's talking, you know, we've talked about cloud washing all these years, John, and now we're talking about SDS washing. How do you differentiate from others in the marketplace? What's different about IBM? Most likely, David, my answer is very, very simple, and it goes back to my software days. Code talks. So we have the code, we have the solutions, we can implement it, and we have results that we can demonstrate with customers and the implementations that we have been doing. That's as simple as that. Ask that any other one. It's going to be most likely a surprising result and answer. So what, how did you guys move so fast on the portfolio refresh? Was that kind of like, hey, let's refresh the portfolio? I mean, I'm oversimplifying. You guys make decisions, but I mean, we know Ambus Coya was involved. He has a certain cross-functional view. I mean, last year at Edge, we talked a lot about, even two Edges ago, two years earlier, you could see the writing on the wall, storage at the center of the value proposition. Was it a two-year process? Was it a one-year sprint? How did you guys do it so fast? Well, it is an ongoing process. So, you know, we have our roadmaps. We are continuously writing our roadmaps into the future, certainly following the vision that we have. So, IE, you definitely want to go down the software-defined storage path. We want to drive flesh everywhere, and third, but last but not least, we want to have virtualization across the board. So, this is basically the paradigm in which we are developing our products. And certainly, it is a big advantage for us to have a software portfolio, which we can reuse in all the things that we are doing. You know, we were pretty critical of you guys two years ago. That's true, I remember that. We were super, I mean, we weren't like, stabbing in the back. Objective is the word I would use, objective. He's an analyst, I'm a blogger, we say critical, fail, you know. No, I mean, it was clear that there was the old IBM storage Mojo, but then there was, you felt like a wave coming, but you couldn't, like, get your arms around it. Was that the trigger point where it's just like, it's just so obvious now that storage now becomes the primary? I mean, you look at across the industry, storage is the heartbeat of everything now. It is, and why? Because data matters, right? Data moves into information, moves into insight, moves into competitive advantage. So, this is all about the data management and it comes also down to storage management when you talk from an infrastructure perspective. When was the flash point, the rallying cry internally, that can you put it like, not data, maybe it has a Pearl Harbor like day where you say, hey, you know, I was in all hands meeting, was there a flash point? I know your desire that you would like to have this one single moment, but it was a journey. As always, it's a journey, it's your brainstorming around it, but clearly we made the decision to go to an organic storage portfolio many years back now, me one more than five years, and then we transformed from there, and I think now we have the best portfolio in the industry. Yeah, sometimes you got to go slow to go fast, right? That is true, and you want to be sure what you are doing so that you can deliver on the promise of IBM delivering high quality. We got a question from the crowd, asking me to ask you, what's real in the new portfolio? So what's real and what's coming? So I was at the Monday meeting in Boston, so I'm going to just go back to my notes. So there's a new file system. Our file data event, yes. There's this GPFS variant. Elastic storage, yeah. There's elastic storage, there's a. SVC on the block side, we just refresh it. SVC, there's pieces of Watson. Right. That you're bringing in, and then there's some object technology. Correct. To sort of metadata construct. Yeah. The vision for the future, basically. Yeah, okay. What else, am I missing anything? Those comprise elastic storage? They are comprising elastic storage. They are all real, definitely. And when you take a look at our platforms that we have, software is always playing a very major role. So back to the speed of development that we can bring to market. It's also because we can reuse the components that we are having on our platforms, given that we are all developing an open stack, and that we have this common layer of software that we can be using. And so I guess the other piece of that is the data services that today reside within, maybe it's XIV, or certainly SVC, V7000, those play in elastic storage. They do. They definitely get connected to elastic storage. They play a role, take XIV, for example, with the grid scalability that we have. It's a perfect play for cloud implementations. But also the software is the value add factor that helps us to implement the value that we bring. Well, and I was, David Floyer was just telling me, talking, we were talking about XIV's quality of service capabilities. Capacity, performance, and bandwidth. And reliability. And the ability, so quality of service, and the ability to set thresholds so cloud service providers can set a ceiling or a floor. So I can guarantee you a thousand IOPS, for example. Exactly. And this much bandwidth. Absolutely. Is that unique in the marketplace? It is absolutely unique for that machine type, for the architecture. And this is something that differentiates us and for the use cases that you just described. It's a perfect solution. And I can do that with an API call, ostensibly, yeah? That's it. Exactly. All right, Sebastian, that's... So the organic stuff's working. I love that answer, and I appreciate that. I can follow in your history. I kind of know the storage. DNA is very strong with an IBM, but now it's pretty hot. We're impressed with the blue mix on the cloud side. I mean, it's just getting started. I mean, we'll see what comes out of that. Certainly the team is energized. We love the team, but we'll see how they knock down for deployments. But cloud coming away, how much of the storage group now is ingratiated within the whole company? Because that's some things your competitors have problems with, which is getting a rallying cry from one group integrated into the other parts of IBM. Well, I mean, storage is strategic for the company. And when you think about our strategy on cloud, analytic, mobile, and social, storage is really at the heart of the infrastructure. It's where data basically is being handled. So from that perspective, we are not only completely incorporated and integrated in the strategic initiatives of IBM, but we are also teaming very much so with our brothers and sisters and other groups of IBM to come forward with solutions that are comprising the entire storage stack. Okay, so I got to ask you, what surprised you this year? From the last time we spoke, what was the big surprise for you? I mean, in a good way, it doesn't feel like something negative. Some guys are, the Canadian guys, like, well, surprise meant bad thing. It could be a good surprise. What surprised you in the way that you didn't expect it, a big sale, big customer? What was the big thing? I remember well our conversation last year when we talked about trends in the marketplace and we tried to predict a couple of things. So what is surprising to me is that we were pretty good in predicting what's going to happen. The biggest surprise to me is how fast it happened. How fast it happened. The speed in the industry, the fast we adapt new technologies, is just amazing to me. Okay, so what's the prediction for this year? Let's do a little riffing on this year. What's coming down the pike? Well, certainly elastic storage, I think is going to be taken from the marketplace. A lot of excitement around it right now. And I also believe that flesh continues to be one of the major themes in the industry, where we have now crossed the tipping point, where we are going to see huge flesh installations where mechanical disc is most likely going to disappear. But where it might be in a combination with elastic storage and the back end structure on tape. Fourth thing, an all-flash array is the killer answer. Is that just one small niche of the market or? It is not the answer to everything, but is the answer for accelerated performance on certain applications. And it's a perfect implementation for certain infrastructures where you can just basically inject a boost into the performance perspective. Do you think the resolution of the three variables of high IOPS throughput and cost per gigabyte will ever be resolved in one system? Or will there still be, oh, I'm going to use low latency transactional, do some flash, optimize up, and then through all the big data and more, could be tape. We heard tape earlier, a tape and a disc. Well, it depends on how you define a system, but I think from a platform perspective, it's most likely comprised out of multiple platforms, but I think the architecture will be unique and taken in a common way. So no one silver bullet? I don't think so. I don't think so. The God box, it's called. Okay, so the final question is, how's sales? Sales is always doing well. Team is excited about the stuff that we have on the truck. Customers are excited, so what else can you use for? If you're on theCUBE next year, we know you're doing good because you're still around sales. It's a tough business. It's the third year in a row. It's the third year in a row. So there you go. Come to theCUBE, you get promoted or sell your company. That's it. Worldwide Global, we'll add some stuff to your title next year. Final question, I'll give you the final word. Share it with the folks out there in your own words. Why this year is so important in the tech industry? What is the big action point for the folks that aren't inside the ropes? Don't understand what's going on. They're sitting back, reading the Wall Street Journal. Why is this such a major inflation point? I would say very easily, maybe you are determining your competitive advantage by rejuvenating your infrastructure because infrastructure matters. Okay, Sebastian here inside theCUBE. We'll be right back with our next guest after this short break.