 With theCUBE, for IBM, Paul's IBM's big cloud show, a lot of big game changes in the new year. I'm John Furrier, the founder of Slip and Angle. I'm joined by co-host Dave Vellante, co-founder of wikibon.org. It's theCUBE, we go out to the events, Jason Gardner, vice president of Pure Systems, product management at IBM. Welcome back to theCUBE, CUBE alumni. Thank you. Boy, the world's changed. Cloud is growth, middleware, billion dollars of software investments, new capabilities, new technology, new software investments, new capabilities, soft layer kind of under the hood. Big changes, how do you feel about it and what's your summary so far? I think, you know, very excited about it. When I look at the overall change that's happening within the overall IT industry and what's happening with cloud is it's really transforming the way that IT looks at its economics. And it's really not just about a set of technologies or a set of processes, but it's really around changing business models and I think that's really what excites me about this whole thing. So reinventing of the cloud is a business focus. CUBE, how do you guys handle that from a middleware standpoint? Because you have a lot of legacy, so you get, you know, Greenfield or, you know, new expansion and now you have existing. So what are some of the things you guys announced today? Yeah, so I think probably the biggest thing that we announced was we announced the Pure Application Service, which is based on the soft layer, which is really the ability for us to take traditional software, such as middleware, and be able to bring the public cloud. And really the way that we do that is we announced the Pure Application, you know, I think 20 months ago, is one of the big topics that we talked about there was around patterns. And the pattern concept encapsulates complex topologies treated as a single entity for deployment onto your private cloud enterprise, but what we've done now is we've built a public cloud. So if you build your patterns in your private you can move them to public or the other way around it, you can do some dev tests in public and move them to private. And the patterns is now a foundation technology to allow you to transition from one to the other, and it's really around the hybrid capabilities that clients are looking for. So I think that's really what's exciting with the announced that we have today. So we have a beta going on with the Pure Application and a lot of great clients that are using it right now and really getting some good traction out of it, so we're excited. Is the idea that should be a seamless sort of transition from public to private and back? When you bring in things, really what the whole concept is is to extend the boundaries of the internal data center to include the public cloud. That's really what we're trying to do here. And so whether it's technologies like the Pure Application system or the application service, or whether it's our smart cloud orchestrator and some of our application performance management and all of the IT operation software that we run, that's really what it's about. It's about taking this closed data center that you have and extending it to include the cloud so that it becomes much more seamless and you can move or go back and forth orchestrator across. How have patterns evolved matured since you guys first announced Pure? Because you were the first to have that concept. Everybody used to talk about that concept. IBM was really the first to actually have what I would say productize it. So you had a lead there. But as well, you have an ecosystem that's contributing to the patterns. And so I would imagine you had a steep ramp in terms of pattern maturity. I don't know if you could talk about that a little bit. Yeah, well, we learned early on that it's a pattern led technology. It's the workload first and the system second. Which is why moving it to the public cloud is just a natural step for you because the public cloud is just infrastructure and it's really starting at the workload. And so the patterns have really taken off and we've got over 200 middleware patterns from ISVs and from IBM. And this is really what the lead generator is for us. But it's also evolved. It's not a static technology and as you look at cloud the cloud, the race for the cloud is going to be won by the ecosystem. Right? And to embrace the ecosystem you need to be open. And so I think the pattern technology is really going to evolve and continue to evolve to incorporate more technologies like heat and hot. Standards such as TOSCA are really going to be a major contributor to creating traction within patterns and continue to grow that capability. And we're going to evolve patterns over time in that same fashion because it's really the bread and butter of the technology to move it back and forth. So like we said, the race for the cloud will be won by the ecosystem and you got to have open as part of that equation. What does it mean to have open patterns? Well, it's not that the pattern is open, like the content it's the framework technology, right? Do you have a proprietary scripting language or do you use Chef Puppet? Do you have is it a proprietary language that talks about topology or is it something like hot? That's really what it's about. It's around the foundation framework. You can take a look at Java. The explosion of Java in the 1990s really was to be able to take a program and run it on multiple platforms because it's just a framework. Java itself is not an application. It's all the technologies, all the innovation is in the application itself. That's the same thing with patterns is it's just creating that ubiquitous layer to move you from public to private, from system to system. It's the foundation framework. And the reason why Java took off was because it was open. So can you step up there on pure? Peter was on before Peter McCaffrey. He talked about some of the latest IDC numbers. Market's growing and I think 75%. You guys are growing close to let's say 175% according to IDC. So where are you seeing traction? Where's that growth coming from? Some of it's got to be coming from your traditional server business. Some of it's got to be incremental. I wonder if you could address that. Yeah, so I think this is really what's getting us excited here because we had a fantastic 2013. We grew very, very fast and a lot of traction with our clients. But some of the stats underneath that, I'm kind of a numbers guy and you know, almost 30% of our sales last year were brand new customers to IBM. And IBM's not exactly a small company. So there's not a lot of customers out there that have never done business with IBM and so it's a technology that's attracting new clients. The second piece to it though that I think that was really getting us fired up is that 35% of our sales in a fourth quarter were repeat buys. Which means that customers bought, they implemented, hit production, liked it, saw enough value in it to buy more. And so as you create more customers, you get more people going into production, get more people buying and so that's really kind of an exciting sort of, it's the beginning of the hockey stick is that sort of equation there. A lot of service provider traction there? Yeah, quite a bit of service traction there. For the most part, you know, I think it was a lot of I'd say traditional traditional clients especially in the banking and insurance space. The insurance space is going through its transformation especially in the healthcare space right now and a lot of government around the world. So we did sell in over 30 or 40 different countries last year and so that traction is really worldwide and it's there's a few industries that are sticking out but really great traction there. Jason, I want to ask you about the you said you're into the numbers and you get a lot of new clients. 70% of the attendees here have been reported as new to Pulse. Okay. So you got softwares bringing in some new kind of new mojo if you will, new customers. What about the existing customers? Because on on-prem the hybrid cloud is the message. Basically, I mean bottom line it's hybrid cloud. You got Big Data meets hybrid cloud, put some Watson on top of it, dress it up with Watson suit, you got a good solution. But in the middle where it's hybrid that means data center on-premises really critical. Can you talk about how that affects your roadmap, where you are what tweaks you're making, what new capabilities in context to the enterprise buyer? Yeah, so I think in looking at the enterprise buyer is we did a great job at building out a fantastic system cloud in a box. Being able to roll into an enterprise, be able to run patterns. We've taken that concept, we brought it to the public cloud, so to be able to provide that hybrid capability. But in parallel, we're also focusing on that system itself. And we've got some great announcements coming up here where we're going to be coming out with a new version, which is really going to focus on I'll call multi-system management. So right now today you kind of manage yourself in isolation or manage yourself in pods but what we're doing is we're taking that and we're going to be able to manage high availability multi-system deploys and looking at really providing a single viewpoint into the management of your overall system and the management of an application across multiple sites, disaster recovery high availability. What is the coolest thing you've seen with some of your customers? I was reading the tweets here, we've got the crowd chat going on it says Maria and Tom's session made great points about using pure with science, great stuff right? So anecdotally you're talking to the customers out there and looking at the landscape you run the product management when it hits the market, what are some of the coolest cool things you've seen, game changing new things that surprise you and then just wow, that was impressive. Yeah, I think Maria and Tom's use at the Desert Research Institute is a very innovative innovative way to use the patterns I think that's really cool to me I think probably the biggest one that I've seen is clients when they see it and they actually start talking about it themselves is really what gets me up and we talk about it as being a time compression machine right? Something that took you months now takes weeks or days something that took weeks or days now takes hours we have a client who can update their entire enterprise service bus like 18 different middleware pieces to it they can build that from ground up in less than 3 hours and they can switch it over in less than 3 minutes where before they used to spend long weekends to be able to do that once a year and they could never be very innovative because they could only do it once a year and it was the scariest 72 hours that they had of the year and they had all this preparation for it and now they can do it on essentially almost a weekly basis they build up the second system switch it over with 3 minutes and they keep the old one around for a day or two to make sure nothing's wrong and then they work on the next one and they've been able to ping pong back and forth and be able to drive some very rapid innovation there and I think that's that rapid innovation that's really something that's cool and exciting because as you look at the leaders of the next generation of IT are going to be those that can move fast and understand the game changing thing is time it is absolutely because you can't buy time and also time is money as they say literally transactions, putting things in the hands of the customer explain to the folks patterns one more time because patterns it's kind of elusive what is a pattern? I'm glad you asked that question because we've been going at this for about 18, 19 months really I'll be honest with you the best way to see it is see it in action but a pattern is an encapsulation of a topology if you think of a web application a web application contains HTTP servers it contains web servers caching, security like LDAP includes a database all these things are all these individual parts that are deployed into your enterprise across a wide variety of different systems a pattern as a single entity and then be able to help manage that topology and to manage topology by managing its elasticity the performance of it, how it gets deployed whether it's dev, test or production what kind of operating system is underneath it and deals with all the mundane things that it takes to just install software except it does it as a single entity you can monitor it manage it, maintain it as one as opposed to as 10, 15 different individual piece parts this concept of a single managed entity taking liberties with the small medium enterprise enterprises are starting to realize that first of all if they can put in that chunk of infrastructure it allows them to do other more important things the other thing about that is we're seeing the higher they can integrate up the stack the more value that they're getting so I wonder if you could confirm or deny that if you have examples are you seeing similar type of traction in the marketplace in that regard? Yeah well I think that's essentially the value proposition of what we're doing and to me the proof point is just success in the business but to me definitely going from your compute nodes up into your memory, your networking, your storage into your operating system, your virtualization your management, your deployment and ultimately into the middleware layer so that really what the client needs to worry about is the application on top it's invaluable to them because they manage this through spreadsheets and documents and they have very few repeatable processes out there that they can actually deploy the same piece of software twice the same way because they've got hundreds of manual steps that are out there and this value as they move up the stack is really being, is really resonating with them I remember I was at the pure announcement when it was 18 months ago or so it was in April somewhere April 11th, yep I ended up having lunch that day with Steve Mills and I asked them what's the premium that you pay for pure, for this expert integrated systems he said there isn't one, I'm like come on there's got to be a premium there's value there and he goes trust me all the pricing, I review everything to the detail, there's no premium we're pricing this thing you know, no premium to traditional servers and I said well why wouldn't everybody buy that and he was frank he said concerns about lock in so I wonder if you could talk about that dynamic how that's changed or not changed over the last 18 months why wouldn't they buy? Yeah and you know lock in is one of them so if I look at the reasons why not and why clients wouldn't lock in is one of them and that's why embracing open frameworks for patterns is really key so that you can then take it and move it somewhere else if you want to the second piece to it is organization here you have a system that's crossing the networking team, the storage team the compute team, the middleware team and everything like that and you know, we have a concept, we have a saying which is sometimes you're letting the turkeys vote for Christmas they're not going to vote yes and so it's that organization momentum I think that we have to get across and jump that cashing for, I think is a very important piece to it and so we've written papers and helped clients with that because changes is something that clients don't necessarily want or the people, the organization might not want and people in natural areas need to change but the dollars are there, I'm sure you've seen the examples of telephone numbers in ROI and the ROI numbers and the returns are high double digits, we've had some clients as high as 75% 76% I've seen just recently to mid to high 20s at the low ends of it and and once you get that, that's why you get that repeat buy is because they first look at it and say you're crazy I don't believe you then when they see it they validate it, they buy it themselves and then they get into production and they're like wow all my projects are going here and that's what we're seeing right now Jason we got a wrap here but I want to get one final question for you and the segment what's next for pure what's on the horizon obviously since we last talked you guys chipping away at it big game changing moving down the field with cloud, more enablement more agile, more flexibility for customers with all the business outcome discussions what's next on the road map, you managed product manager what's coming down the pipe honestly it's two things one which is continue on the road map I think we've got something special for the cloud in a box for your private and then riding the wave on public everybody's going to be wanting to be able to move workload to the public cloud patterns is a way to do it we want to make that the simplest easiest most cost effective way for people to move to public cloud and to me that's a winner combination right there well if you don't like patterns, the word patterns think of them as Lego blocks they're the same kind of thing leverage, good leverage it's a sandbox open and all about creating value Jason thanks for joining the cube we'll be right back with our next guest we've got the next up segment analyst we've got David Pogue from Yahoo formerly the New York Times stay with us