 Live from Las Vegas, it's theCUBE. Covering Edge 2016, brought to you by IBM. Now, here are your hosts, Dave Vellante and Stu Miniman. Welcome back to Las Vegas, everybody. This is day two at IBM Edge. James Governor's here, he's the co-founder and analyst at Monk Chips. He's going to kick off the day with us. James, good to see you. Yeah, good to see you, Dave. So, infrastructure show, infrastructures. You know, you're always at the IBM analyst meetings with Rosemilia and his predecessors. It's not necessarily your wheelhouse, but it isn't, it isn't, right? You pay attention to that stuff. I know developers is really your wheelhouse, but I'm going to ask you anyway, what are your thoughts on Edge? You're always a man of very strong opinions, especially when it comes to bad coffee. Yeah, yeah. What are your thoughts on Edge so far? Well, I think from my perspective, as you say, we come at the world from the lens of software and the choices that developers are making. So probably the key messaging that I've been seeing, really it's the customer stories. So when you've got the state of California and they're like, okay, well, we're going to start running Spark on the mainframe. We're going to be taking advantage of open source technology like that. Or other organizations we've seen today that are running, you know, Hortonworks, MongoDB, Canonical, you know, Mark Shuttleworth was here yesterday, that basically, if we look at the, the sort of divergence we had where traditionally we had enterprise IT, it's Red Hat, you know, that's the open source thing. We'll get that supported on power. To see all of these other things, I think is frankly just important for IBM if they want to have a vibrant ecosystem around power. So, you know, Google has been showing it some love and I think that frankly, for it to be sustainable and something that IBM will continue to invest in, they really need to have a platform that developers would want to deploy to. Yeah, you know, in a lot of IBM shows, they'll have like, you know, at Interconnect or at Insight, now World of Watson, they'll have a dev at Insight or dev at World of Watson. They don't do it here, should they? I think it's really hard to do. I've been involved in some of those and quite frankly, conference within a conference can be a struggle. And, you know, I think that there's a slight divergence. I mean, this is mostly a customer conference. Obviously there are, it's also an education conference, but I think that the, we don't necessarily see the devs allowed to come. It's like, are they, you know, how do you get them to Vegas? And so you can give them a free ticket, but then, you know, have they got the travel budget? Have they been given the, certainly in the corporate world of development? And then if there's sort of, you know, South of Market or, you know, sort of San Francisco developers, they may not really want to go to Vegas for this. So I think it's a tough one. I do, however, think that there would be room for a conference that was looking at these platforms, but very much with a developer-focused angle up to it. So bring together all the tribes, you know, bring together, you know, the Docker folks, canonical folks, you know, as I say, EngineX, the announcement that that was supported. So I think these are the right platforms, certainly that we're seeing open source and modern web developers wanting to use. Well, it's interesting to me that the hardware channels transforming pretty dramatically, as you guys both know, you got the box sellers, and then you got the so-called solution providers, and traditionally solutions have been like SAP or Oracle or Microsoft or VMware, but increasingly the solutions are like guys solving big, hairy, gnarly IoT problems, and they're developers at heart. And they're not box sellers, but they actually either can recommend or they consume lots of services, whether in the cloud or even on-prem. Are the developers a new sort of form of distribution channel for hardware companies? Well, you know, I think they're part of it. I mean, you know, frankly, in a way, these days, it's almost like, I feel like the VCs are one of the most important channels, right? So much of what's going on is into startups and if you made the right bets, you know, if you think about the amount of service that a company like Uber is going to buy, or Airbnb, or these companies are buying huge amounts of compute resource. I think so, you know, that is definitely a channel. I think in terms of the more traditional sort of approaches you're talking about, we are in an era where clearly, you know, there's a lot of talk of disruption. I've mentioned the Ubers and so on, but quite frankly, the threat posture has changed. Businesses genuinely, I think even two or three years ago, if you were saying to them, you know, you need to reassure your outsourcing failed, you need to start again, you need to be investing in new development. They'd be like, wait, we can still buy applications. Whereas today, the focus is much more on actually we need to be investing in, you know, development to get closer to our end users to be more innovative. And I think that that, you know, at any time you call the end of something, generally it's the start of something new. So, you know, when we had the, you know, Nicholas Carr talking about the end of IT, that was almost like the point at which we began to reinvest. It was going to say, you got that one, right? Yeah, but you know, or it's a unipolar world, you know? You know, all of that sort of stuff, the end of history. Generally, every time that happens, there's a big shift and we're right in the midst of one right now. So, talk a little bit about, help us understand IBM's developer strategy and platform strategy. I remember when they announced Bluemix, and I think, I think UI actually might have been at whatever event that was, doing the conference within the conference. And at the time, Bluemix was very much not baked. You know, it was kind of raw. And it looked to some of the folks that we talked to, like, okay, it's the web sphere, playbook, you know, circa whatever it was, 2015, 2014. Help us unpack Bluemix. What's happening there? Is it working? Is it getting traction within the developer community? Well, I think that, I mean, it's an interesting one because in terms of developer-led adoption, or in terms of tech adoption in general, you've got a bottom-up effect, but you've also got a top-down effect. And I'm not going to say that, like, you know, Cloud Foundry has been absolutely, you know, immediate to, like, all of the cool kids, this is what I want to use. However, if you look at Cloud Foundry as a technology platform, and the incredible support it's getting, I mean, you know, Pivotal is quite an engine in its own right for helping people to understand the new kind of development methodologies. You've got IBM on the other side, so the two of them are really going at it. And, you know, you mentioned the WebLogic era, or the WebSphere, sort of an application server area. You had, you know, WebLogic and WebSphere, and that defined a technology space for, you know, a good, you know, 10 years. And I think, you know, we're seeing almost a similar sort of dynamic at the moment with Pivotal putting a huge amount of resources in. IBM putting a huge amount of resources in in terms of some of the new development methodologies and so on. So, you know, it's, I would say less of a bottom-up effect, but definitely they're gaining traction. I mean, we keep running into all sorts of organizations that are using Cloud Foundry technologies in earnest. So, you know, and they'll be using both. You know, so if you're looking at some of the big banks, you know, Bank of America or something, they'll be, you know, two different parts of the organization, they'll be using Pivotal, they'll be using BlueMix as well. So I think that it has been, it is still a ground war. It's still attritional for both of those players, but I think they're definitely defining a space in terms of the new middleware. It's obviously an imperative for IBM. Well, you know, IBM is, they need to sell middleware, right? Yeah. And, you know, there's a platform, I think it's something that their sales people can get their heads around. You know, and it's not just selling the software. I mean, I think one of the things that we've seen, you know, you've seen them have to, again, like Pivotal, they've got now the the BlueMix Garage method. So it's a new way of building software. I mean, if you think about the IBM customers, they've been doing this waterfall development, very old school, you know, very siloed, segmented. You know, oh yeah, we're going to develop this application and deliver it in 18 months. Woo-hoo! But of course, you know, we're now looking at actually, you need to be making production deploys almost on a daily basis. We need to be moving much, much faster. So that it's a cultural change as much as a technical one. And I think, again, that's quite interesting to see. And yes, I would say that the platform has traction. James, a lot of conversations we've been having with IBM and their customers here, it's Linux. It's, you know, Linux on power. It's Linux on Z. It's taking power in Z and putting them in the cloud. I'm curious from the conversations you have with the developers, the practitioners. Doesn't matter, kind of the underlying infrastructure. Are they taking advantage of some of the, you know, special things they can do with things like power in Z? Well, I think, I mean, it's, there's a balance because on the one hand, you want it to not matter. You want it to look and feel and smell like the environments that developers would choose themselves. I think that's why the canonical and Ubuntu needs is so important. Because you can't go to a, you know, a web developer and be like, you're going to use Red Hat now when they've got various different expectations about the shell and, you know, how it should look and feel. So you want it on the one hand to sort of not look any different. But on the other hand, you've got the thing of, actually it needs to perform more effectively. I mean, we had, you know, I think one of the examples this morning, Florida Blue, where they were like, well, what we're effectively doing is using the same open source technology, but we're getting much better power characteristics. So that's when we're right off the bat. You're like, you know, if your green initiative says you need to cut power by 30% across your estate, maybe that's an opportunity. So it's effectively the same stack that runs on Intel. You know, rather than being like, okay, you need to have a new programming model or whatever. So it's, I would just say important that you do want it to sort of have some underlying advantages that then you begin to say, ah, maybe there's a service call I can use. Maybe I'm going to get down at a lower level. But I think one of the things we're seeing, I mean, I'm talking about the Anyone But Amazon coalitions at the moment. But I mean, everyone is, from a vendor perspective, worried about Amazon. That's driving a huge amount of innovation, you know, sort of the, or a huge amount of investment anyway in things like OpenStack. Laterally, it's one of the reasons I think a lot of the vendors are so excited about Docker. But, you know, you're in a position where I think that, clearly, the more you deploy to Amazon, you can have data gravity. If you start using their specific services, you can begin to get locked in on that. And, you know, enterprise customers in general, they will choose a simple well-packaged thing, but they also do worry about portability. And I think it's open source that really provides the means by which there's some comfort factors, you know, that actually we could move back if necessary. So it'll be like, you know, Amazon, you know, they're playing this dance too. It's like, it's just my sequel, you know, it's fine. You'll be able to, you'll be able to, you know. Come on, we have a standard API out there. It is Amazon. There you go. So, Amazon is the standard, you know, factor. One for DynamoDB, and another one for Aurora, and another one for... Don't worry, it'll be, you know. You bring up an interesting point, because obviously, you know, IBM has strong commitment to open source. They've got lots of proof points, what they say in the keynote this morning, 60,000 IBMers contributing to open source. Wonder if we could do kind of a comparing contrast to the other big player that's probably the compare to IBM these days is Oracle. You know, Oracle has the RedStack. Larry Ellison came out in his keynote and said, you know, Amazon has, you know, a new tough competitor, you know, we're going to take them down. Sounds very different from what we're hearing at the IBM show. So, I mean, you're here with us in Vegas. I think you've seen some of the announcements. What's your take on kind of the hybrid cloud message of IBM versus Oracle? Well, you know, Ellison is a showman. Twas ever thus, and he's always been likely to make, you know, big bold statements of stuff. You know, when you say, you know, I think he exposes that Amazon's lead is now over. Like, well, what do you mean by that statement? Because clearly in terms of market penetration, and you know, Amazon's growth is accelerating. They're in a tremendous position, and I think it's important to be realistic about that. You talk about the difference in positioning. One of the things I've noticed in the last couple of days is so yesterday they had an announcement about a tape migration tool that you can, you can, sure you can deploy to software, but actually it'll take your tape stuff and put it into S3 buckets in Amazon. There's a certain, I mean, you know, IBM is nothing if not pragmatic. It's about customer choices. I think, you know, Oracle is a less pragmatic company. Highly opinionated. You know, what we've seen from their perspective is clearly a, you know, they've de-invested in a lot of areas and continue to do that and try and get all of their people working on cloud. I mean, they are a formidable competitor. They are doing some interesting work. I think it's interesting that, you know, where I think IBM, you know, is, yeah, okay, they acquired software and said we're going to do infrastructure. I don't think they've been as, you know, put it this way, I would not want to be in a price wall with Amazon. You know, that does not feel like a great place to be. Now, in terms of tracking cloud pricing, RedMonk obviously keeps a pretty close eye on this and my colleague, Rachel was recently doing some work and it seemed like the price wall was beginning to slow down, but, you know, Oracle's throw down the gauntlet again. That's good for customers. Yeah. You know, lower prices is obviously a good thing. I think that, you know, Oracle's on this journey. They've, you know, they are, for example, internally discovering the value of using Docker. You know, internally they are using far more agile methods. And, you know, look, this is infrastructure that people rely on. So, you know, would I write them off? No, but I think they're definitely, they've got a huge amount of work still to do. It was interesting, Lydia Leong from Gauntler, I think she pointed to some stuff, you know, recently where apparently Oracle has, like, two teams working on infrastructure and they've got this kind of Skunkworks team off on the side building a highly secure private cloud for those customers that are, or should I say, virtual private cloud in a sense, for those customers that are not going to be completely comfortable with an infrastructure play. And, you know, look, they've got some great engineering people over there, you know, at base level, for all the business practices and everything else that Oracle has, the aggression of their marketing, the aggression of their sales, the aggression of their legal team, they've got some great engineers. And I think that that's, you know, that's something that we should be cognizant of. And they've got funding with their chairman and CTO at the helm of the technology division. Absolutely. We just got a couple minutes left. I want to talk about Redmonk, some of the conferences that you guys are doing. I think you just had one. You got Monktoberfest coming up in October. Give us the lay of what's new with you guys and what are you guys talking about with your clients? So, yeah, we just ran our Internet of Things conference thing month last week. That went great. You know, it is very much a maker conference. It's people that are building the platforms for doing this IoT stuff, you know. And, well, some of the key themes there. I mean, I think one of the things we've seen emerging is this notion of kind of conversational IoT, where you've got machines talking to people, talking to machines, there's kind of chatbots, voice, you know, we had hacks, which was Alexa talking to Watson. And, you know, we were trying to do some interesting stuff around sentiment analysis there. I was particularly pleased. Actually, we ran a diversity scholarship funded by a company called Open Censors iOS. We had 21 diversity scholars. And it was nice to, you know, we'd historically given away a bunch of tickets to some women in technology groups. But this time it was more broadly about diversity. We had a bunch of black kids in there that were like, super inspiring. I mean, we had one young guy who was 16 years old at Dalton Hacks on Twitter. And he's all like, yeah, I got a ton of experience in Node Red. And he's like 16. But really impressive youngsters. And, you know, young woman, Rainie Dee, she came in and she was like committed, she was hacking. And, you know, from her perspective, I was like, I've got Andy Stamford-Clock from IBM who invented MQTT. And he's like mentoring me on building this hack. And that just felt great. So that was super good. I mean, Monktoberfest is Stevens Conference, which is great. I just get to turn up and enjoy it. That's in Maine? Is that right? Yeah, in Portland, Maine, in real Portland. And, you know, they have some of the best brewers in the country up there. And it's very much a conference about social and technology and developers and beer. Great city. Yeah, that's a good set of things. I mean, in terms of what we're doing, you know, Red Monk is an interesting time for us because we've been talking about developer-led disruption for more than 10 years now. And now, suddenly, it actually has a thing. I mean, we were outliers. You know, it was like, development's something we outsource to, you know, to break. It's something that, you know, we do requirements and send them off and other people develop it. You know, whereas now we're in an environment where, you know, city is hiring people from Amazon. You know, where, you know, Capital One is at every tech conference there, trying to, you know, look cool and be part of this open source and developer-led movement. You know, where the, I think that the posture has really changed. So it's tremendously exciting for us. The number of organizations that are more interested in working with us and understanding how to better serve developers and work with developers to get better services for end users. So it's tremendously exciting times. More people are interested in what we've got to say. Great. All right, we got to leave it there, James. Thanks very much for kicking things off of us on day two at Edge. Tom Rosamilia, up next. Congratulations on all the success. Good luck with the conferences and we'll see you around the show circuit. Great, thank you so much. All right, keep it right there, everybody. Stu and I will be back with our next guest. This is theCUBE. We're live from Las Vegas, IBM Edge. Bright back. My name is Dave Vellante and I'm a long.