 Live from Las Vegas, Nevada, extracting the signal from the noise. It's theCUBE, covering IBM Edge 2015, brought to you by IBM. We're back. Marie Week is here. She is the general manager of IBM's middleware business. Marie, welcome to theCUBE. It's good to see you again. Terrific to be here. Thanks again. So Edge, this is our fourth Edge. I really like the diversity this year. It's not just the storage show. It's obviously middlewares part of it. A lot of Z, a lot of power, so that's good. Expanding division, a lot of thought leaders. How's it going at Edge? Actually, this is my first Edge. Obviously, lots of other IBM conferences, but this is the first time we've brought together the whole systems view between the server, the storage, and the software. So I'm really excited to be here. We've had some great client conversations on how they're really trying to drive their digital transformation and how they see the synergy. A lot of the customers I talked to said they're delighted that they're now seeing IBM relate to them the way they're organized. That they have all of the infrastructure elements they are bringing together, systems of engagement and systems of record. And now our systems team is really mirroring the way they are bringing things to market themselves and it's a great fit. I was going to ask you about that. You were talking this morning in the kickoff about IBM's organization, you know, the moves that Ginny made in middleware could go into different groups. And so I was personally pleased to see the synergy with the traditional Z and power and storage group. But so obviously you're pleased, clients are pleased that it's working well. You're starting to hit that flywheel effect. Yeah, I mean, what we really tried to do was align with the new solution units around buyer agendas and where people were really investing their time and investing their resources to drive this kind of synergy. And we brought together a good part of the web sphere, the rational and the Tivoli teams into middleware. And it really means that you have the whole life cycle effect covered in one team and covered in a more digital sense. Not just build, run, manage, but how do you really now think about design and really design thinking to drive really compelling digital experiences for your end users, how you then can build and deploy those resources using the cloud, whether that's hybrid, on-premise, public, and how do you manage all of that and optimize it consistently. So we really now become that life cycle platform, that management infrastructure for all the other digital units and engagement models, whether it's cloud, whether it's analytics, whether it's social or mobile, we're really the underpinning of that. And we're seeing a lot of synergy from it. Well, that's an innovation discussion, isn't it? Because you kind of had to go to market before, you could pick and choose and provide the basket, but from an R&D perspective, it changes the equation, doesn't it? And we really are focused on integrating those aspects in the same way we're talking to our customers about decomposing their services, making, we talked earlier about microservices and the API economy, how do you really break down the core capabilities that people need, expose them as services, and allow you to flexibly assemble them as needed with the delivery model you want? Whether that is on-premise the way you have been and we've optimized for Z and for power, or whether that's in a public or a private cloud setting. So it sounds like the promise of SOA 10 years ago, what's changed in middleware in the last decade? I like to think of it as SOA 3.0. We really extended all of those services and now exposed it to the cloud and to the API economy. And much of what we're doing in our middleware, whether that's our new integration bus, or whether it's our API management capability, or whether it's our hybrid cloud services, we're taking all of those web services that people have already created and exposing them directly as RESTful APIs and allowing them not just the technology, that's only one part of the story, but how do they think about the business drivers? How do they monetize those services? How do they think of it as a revenue driver or as a customer satisfaction accelerator? So really getting to the right meat of what's the right granularity of those services, which are the ones that are unique for your enterprise versus ones that you could get from somewhere else. We've launched things like API Harmony on Bluemix where we can actually now discover for the type of service you're looking for at the best match so that you can actually get greater reuse, use other people's services, build out the ecosystem, and it all requires that really robust infrastructure, but it also requires you to be participating in an open ecosystem, the whole community model, how we can expose and share these and drive that real innovation, I think comes from diversity, not just diversity of thought, but different functions, different partners in your ecosystem that can help accelerate what you're doing. So Stu, that's a whole new twist on IT. The IT is a cost center. You're talking about IT in terms of a profit center. And as a growth driver. Yeah, so Marie, we've been trying to help our community understand kind of the new modernization of applications. Some people talk about cloud native applications and the PAS discussion's been going on for more than five years, it seems to every year or so kind of reinvents. Bluemix actually got a lot of people back talking about PAS, so when David Floyer and I were sitting down and it's all about the application life cycle. So Cloud Foundry Summit's going on this week. I know IBM has a very large presence there. Can you help explain to our audience how does kind of the middleware discussion that we've been having in PAS kind of come together what's the overlap, what's the difference? And again, I tend to think of whether it's infrastructure as a service, platform, or SaaS. It depends on who the user is and where they want to deploy the workloads, those services, those digital models. When we're talking about the platform as a service capabilities of Bluemix, it really has energized all of the development community. And it's not just about developers, but we're taking those same middleware services that are in our on-premise offerings that people know and love. We've got thousands of users around the world, and we're exposing them as the core services in Bluemix. So whether it's the Liberty profile, whether it's our support for Node, whether it's our MQ Lite capabilities for robust messaging, whether it's how we're actually driving monitoring and analytics in the life cycle or supporting DevOps, all of those same services are the same core technology, the same skills that you used over those last 10 years, now exposed in a new channel, in a new way, that provides you with really rapid innovation options and reach, because we've also got our community partners, members of that as well. A great example, Pitney Bose is one of our customers and partners, but has offered new services in Bluemix that provide the ability to do address checking and verification as part of the connection that you might drive when you're doing shipping and commerce. All sorts of great opportunities. So I think of, I'm going to simplify it, I look at infrastructure as a service plus, and I say, okay, that's sort of one segment of the market. I see SaaS minus, where the, in the first, the infrastructure kind of defines the past layer, and the latter, it's the packaged application that defines the past layer in your world. It seems like the application development piece defines the infrastructure layer, and it's a different angle on... It really is all about the workload and who wants to use that workload. So we are trying to make sure whether it's exposing core capabilities as an API and a service that a developer could use in Bluemix, or whether it's taking the entire function, the entire workload, our business process management offering on the cloud has the entire environment hosted on soft layer as an infrastructure as a service offering. It's essentially a pre-built managed service that is there for you in the cloud. And we have SaaS offerings that the end user can instantly onboard for process automation, which is critical in the whole digital realm with things like BlueWorks Live. So at every level, whether it's the end user at the SaaS layer, whether it's the developer at the Bluemix layer, or whether it's somebody who's using those infrastructure services in the full workload with infrastructure as a service, we've got all of the pieces. And we're trying to make those options of how you deliver and how you consume them. And we're trying to make that not just again a technology statement, but a business model statement. So this week we announced new pricing models so that we really feel we have the most flexible cloud pricing in the industry. If you want to buy our software on-premise upfront, we can do that. You want to provide it from a monthly perspective, we can do that. You want to use it on a consumption basis in Bluemix, we can do that. So any way you want to take it, we do not want the pricing model or the cost to be a barrier. And this whole notion of an open source plus model that you can have access to all of our technology for free use to develop your innovations is what we really want people to understand. That's interesting. So I was listening to you talk about the current strategy. We've sort of seen this movie before with WebSphere at IBM. I mean, you're going to school on that and I was going to ask you what's changed. And obviously the cloud has changed. The pricing models are changing. So I'm hearing it's not a one size fits all pricing model and you're competing and differentiating with that flexibility for clients. Exactly. If you want just a support model, if you want a monthly model or you want to buy it all upfront, those are all options. However you want to consume it. And customers want to consume differently. Exactly. Some guys don't mind capex, banks. We got a lot of money. And some people really want to focus on just what's the minimum OPEX model that they can predictably address. And we can do that too. Yeah. So Marie, one of the biggest challenges at IT is typically people don't want to change. You know, changing, you know, the infrastructure that they have, oh, I'm trained on it, I know, and everything. Using things like open source helps with the pace and change, especially if you talk about applications. I mean, that's what we run our businesses on. You know, it's usually a long commitment. You know, I talked to a CIO of a large company a week or so ago and he said, you know, you give IT, you know, 24 months and a couple million dollars budget, we can build the Taj Mahal and that's great. We're good at that. But today it's about moving faster and delivering that. How are you helping customers? And how are we doing as an industry as a whole at moving things faster? Well, I think the whole notion of Agile and DevOps is really breaking that paradigm and it's absolutely essential and we certainly see on the mobile side of the equation, you know, cycle times that are down to two weeks, you know, some companies that are iterating on their mobile app every single day. That model is absolutely there and mandatory to be competitive, but we like to talk about multi-speed IT. You want those systems of engagement to be updated every day, but you're not going to change your core transaction system. You're not going to change your systems of record nor do you want to every day. You want stability, you want to make sure you've got the resiliency to support those transactions, those customers, that engagement information in a consistent way. So one of the things that we really see as a driver with hybrid cloud integration, with API management, the whole API economy thought, that integration allows you the flexibility of this multi-speed, the digital, the systems of engagements, really updating very quickly through cloud, through mobile, but integrating in a very consistent way, it's kind of a gearbox or the transmission for how you continue to leverage all of those investments in the applications and the enterprise systems that are running those mission critical processes. And the ability to connect those is really what the whole notion of our integration is all about. One of the biggest challenges we hear from CIOs that we talk to in our community is, the corner office will say, okay, make this happen, transform this piece of our business, and they'll bring in the technology, they got the skill sets to do it, but it's the business process that is the sticking point. You talked about decomposing components of software. Can we do that with business process? What are you doing? What's IBM doing in helping its clients deal with that business process stasis? Absolutely a critical aspect, and one of the things that we've seen real interest and demand on, both decision automation as well as process transformation, and a lot of it being triggered by understanding the user and the buyer. A lot of the work that we've been doing with Apple around mobile first, a lot of the whole notion of the systems of engagement mandate that you change those backend systems to allow for self-service, to bypass the steps that may have been done by other parts of your organization, and by having all of that capability hosted and available on the cloud and integrated, the average mobile first solution that we've been developing out there, 22 of them now from a mobile first perspective with Apple, we're seeing those apps themselves typically have up to 18 APIs. When we started, it was more like six. So we're seeing a tripling of that, and every one of those APIs invokes a process flow and a call to another set of business services. So again, if you have the combination of being able to expose those, and then choreograph them in the way you want your new business engagement model to happen, you can have results very, very quickly. And we're now leveraging other cloud technologies like our Pure App capabilities, both in the system sense on premise, as software, and as a service on software to enable people to get those workloads up and running in a matter of days. So really accelerating the transformation issues that you're seeing. So you're talking about the API economy, I'm envisioning just triggering interactions with other processes, high fidelity content streaming in real time to a JSON endpoint, really powerful. And so a lot of the inertia with regard to business process changes, the business owners think I don't want to change, but with what you're describing, is mobile apps in particular, is the mandate for change. Do you see that awareness in the majority of customers or is it still the top 10%? I see the whole notion of digital and mobile transformation as an absolute imperative from all of the customers. In fact, this afternoon we're going to talk more about the digital transformation agenda. Most of them don't feel well prepared to do it though. So they see the mandate for change, but they need help in getting there. And that's one of the things that we're really trying to drive on what are some of the imperatives and the best practices and how we can help. We did a new study from our Center for Applied Insight about getting into the mind of generation D, and all about the digital generation and what's really needed. And some of the insights are really amazing that digital engaged both people and enterprises are much more likely to use social, to use APIs, to use cloud services. And if they can really anoint these digital torch bearers for their organization, they can have a big effect. Yeah, we had on earlier Brad, a director of engineering at Boeing. He moved from Seattle to South Carolina to create an incubator. And because he wanted to be closer to younger people, the generation D, it seems like innovation, we've been talking about this all week, innovation is not coming from the silicon so much, even though we've marched to the drama, the cadence of Moore's law for decades in this industry. It's now coming from combining technologies in new ways. And generation D is really suited to do that. You see it with Uber, Airbnb, Waze, they're combinatorial technologies. And so the challenge is education, ideas, being able to execute on those ideas. And but you're hopeful for the future. I'm very hopeful. But I think what we've seen in all of these is it's not just the technology, you really need the people and the processes and the support. So there really needs to be a mandate in the organization where we're bridging business and IT and bringing that kind of sponsorship together. Then you can knock down all of these hurdles and really get rapid innovation. The technology is there. The ability to drive the connections is there. It's really empowering the teams to do it. So you remember Y2K, I'm sure. And it was like a mandate to spend money on who knows if it's actually going to deliver any business value, but we need to do it. I feel like there's almost a Y2K frenzy for the digital economy, except the difference is a much clearer path to business value. I mean, it's a different world and a different time and a different value proposition. But the productivity benefit seems to be much potentially greater than it was, you know, the beginning of the millennium. Well, there's both the productivity and the revenue opportunities. We've seen, in general, 3.7 times more likelihood of propensity to new clients when you're engaging digitally. That's a direct revenue driver. On the flip side, we have seen companies, customers move from one bank to another just because they didn't like their mobile app. So there is both a potential carrot and a stick in terms of that on the operational efficiency, on the revenue drivers, on the customer satisfaction that comes from it, but also the cost of loss if you're not really engaging in the way customers really want to deliver and experience your brand. So, we're getting run out of time here, but I wonder if you could talk about the developer community, something we haven't touched on. At Interconnect, you had a big emphasis on, you know, at Dev, IBM certainly reaching out to that developer community. Give us the update on developers. Well, we've certainly been very, very focused on attracting developers to our platform with Bluemix, expanding the support for open standards across the environment, delivering, as I said, the same open source business models in an open source plus way so developers anywhere can get access to all of our core software for that development free of charge, and then having the flexible pricing models to engage as well with continued open standard support, whether that's on the cloud foundry or at the open stack level, whether that's extensions that we continue to provide in terms of delivery options like Docker, which I think is going to be really transformative to me, it has the potential of having the same impact on operational efficiency that virtualization did by enabling enterprise container delivery of the components and services that you're driving, and then continuing to add new support for Internet of Things, for mobile, you know, we really want to be able to reach developers wherever they are and have them leverage the services that we can deliver at scale like nobody else. Yeah, Maria, actually, if I can comment on that, you know, I love server virtualization, what it did, I've worked with it for 15 years, but it actually made us keep our legacy applications because I shove it in a VM, keep it in an old operating system, and I see containerization in Docker especially as to helping accelerate that new application development. Absolutely. All right, Marie, all kinds of interesting stuff going on, innovations, you're in the middle of it. I'll tell you about it. Absolutely. Marie, thanks very much for coming to theCUBE, it was great to see you again. Thank you, pleasure. Keep right there, everybody, Stu and I will be back with our next guest right after this, this is Edge 2015, we're live from Las Vegas, this is theCUBE, we'll be right back.