 I've got a very special guest coming on. I'm here with my co-host right now, John MacArthur. And Brian Traskowski, who is the general manager of the IBM storage division. Brian, you've been on the queue before, but not in this type of setting. Thanks very much for making time out of your busy schedule. Glad to be here. So this is really kind of your group's show. I mean, it's kind of the coming out party for IBM, IBM Edge up on the stage this morning. How do you feel? Great. This is a first of its kind event for us, as you said. So we haven't done an event of this scale or magnitude in the past. So it is a coming out party of sorts. And we expect to continue it into the future and certainly grow it over time. I was talking to Dave Rasmussen last night. He was explaining to me that last year you had a customer event. Didn't have a name. It was just got a bunch of customers together. And it was very successful. And this event, Edge, spawned from that interaction, right? Is that? Yeah. Well, we've been running an STG, what we call smarter computing event, client events. And as we've noticed over the last year or two, storage is becoming an increasingly integral part of our smarter computing strategy. And we thought it warranted some new thinking and a new venue and a new approach as we move forward. And our clients and our business partners have been looking for something I believe of this nature. Well, it feels energized here. And to me, the observation that we were making at the top of the discussion here was that IBM, 10 years ago, put some of its storage initiatives, its system storage initiatives on ice and made some moves. And then you had to play some catch up. You had to make some acquisitions. And you've been doing that over the past five, six, seven years. Now, people might expect, OK, you're part of the systems division. You're part of the software division now. Maybe you could piggyback on those events. But you're choosing to actually shine a light on storage. And the message here is all about the portfolio. Talk about that a little bit. I mean, we've been asking, can IBM get back its storage mojo? Sure. Well, and I think you make a couple good points. We're focused on innovation and integration at the same time. So we know we need to innovate in the storage space. And we've been doing that for 60-some years. So depending on your point of view, you could argue we created the storage industry. Back in the 1950s, right? So we have a lot of experience here. So we need to leverage what we've done in the storage space over a long period of time. At the same time, I don't think there's anyone in the industry that can integrate the capabilities the way our clients are asking us to, to your point, with servers, with software, with services, components, and IBM. So it's not either or one or the other. We need to be good at storage and innovating around storage. But more and more of our clients are demanding this notion around integration. And I think that's critically important to us going forward. We had Laura on earlier. And we were talking about the whole challenge. And I'll ask you the question. So the hard part of your job is, like you said, you've got the integration. And there's immediate ROI to doing integration on things that maybe others don't pay as much attention to. Look at the integration you've done with Protectier and the main frame side. Look at the average prices of those and the margins that you get for those. And I know you can't comment specifically on that. But that's good business. That drives ROI and free cash flow. And we made the comment that IBM outperformed Apple last year as a stock. A lot of people don't really pay attention to that. At the same time, you've got a lot of pressure from clients to sort of chase a lot of what the startups are doing, a lot of the new features. So how do you balance those? Can you do both? I think you can. I mean, first of all, a lot of the competitors in our space I think would like to look a lot like IBM. So our ability to integrate our broad software portfolio, our broad services portfolio, that is some unique value add we can bring to our clients. And unique capability we can leverage for our business partners advantage as well. So I think we can be both. We have to be able to do both. And frankly, our competitors aspire to be more like IBM. So one of my challenges to your point is, A, do what we need to do in storage. But equally important, leverage what's powerful and good about the rest of IBM. Because I think that's where the real value is delivered to our clients in the end. Can you talk a little bit about how it was down at the, and we saw each other down at the Pure Systems, the Pure Flex announcement, which is very impressive, by the way. We've said a lot of very positive things about that. Storage fits into that. Can you talk about how you're drafting off of that announcement, what it means to you, that whole strategy of integrated systems? Well, first of all, Pure Systems, Pure Flex, and Pure Application Systems are clean sheet initiatives from IBM. So we really started from scratch, based on our understanding of what clients are looking for in that integrated space. And it really is a new category, expert integrated systems. And storage has been and will continue to be an integral part of that solution set going forward. So have we drafted on it? I would say no. I think we've been an integral part of the design and development of that. A lot of the capabilities we delivered in storage over the last many years are an integral part of that solution set and frankly has influenced the design to a great extent around graphical user interface, virtualization, and some of those capabilities. Okay, so that's, so now, you guys made the B&T acquisition, I don't know, over a year ago now. And that part of that IP, a big part of that IP was the scale-in networking, which is sort of a new term that you guys put forth. That's obviously IP that's part of your organization. Now, you talked about sort of starting from scratch, right? Which was, I think, a very impressive way to approach it. How about the storage piece? How does storage fit in? You're uniquely allowing other people storage. I don't think anybody else does that with their converged infrastructure, what you guys call expert integrated systems. Talk about how storage fits into that white sheet of paper design. Well, I think it starts with what we were trying to accomplish with peer systems to begin with, the integrated nature of the platform, the ability to scale seamlessly, the ability to simplify the deployment of the technology, the ability to simplify the management of the overall infrastructure, and the ability to add it in very efficient ways that you want to add more capacity and more functionality and feature set. So, storage in that regard and what we've done with technologies like sand volume controller and our virtualization capabilities was a natural fit as part of that solution set. At the same time to your point, we know storage needs to be evolutionary, not necessarily revolutionary. And we understand that clients have made investments in pre-existing storage platforms, whether it's from IBM or third party. So, our ability to allow clients to integrate that existing infrastructure investment into those systems, we think is an important differentiator that allows customers to protect that investment and yet get the advantages from the integrated capabilities we deliver with peer. So Brian, when, so EMC went down a path with their storage management software platform, it's probably going back 10 years or so when Chris Cahagan was running it, I think, where they were going to manage everybody else's storage. And so, and they made a massive investment, the integration effort that they tried to put forward to write to everybody's interfaces so that they could manage non-EMC storage. They really, they tried that and they failed, they frankly failed that and they backed away from it and they said, no, we're just, we're going to manage our stuff better than anybody else. How are you different and why are you going to succeed? It's not just about management. So John, what we're doing is focused on virtualizing that environment. So at the core of this is our ability to virtualize those volumes and by doing so then you can leverage a common user interface. So it's about what is that management layer? How do you accomplish it? And it's not just being good at managing to a set of industry standard interfaces for management sake. It's about how do you integrate this in a fashion that allows you to virtualize everybody's storage, integrate it in a unique way and then naturally you get the management capability with that. And how does sort of, someone was talking to John Singh earlier and he was talking about there's a set of investments that companies are making on managing 30% more capacity every year, 20% more efficiently because that budget's getting squeezed. So in terms of sort of these, this approach, are we focused on that 30% growth at 20% less cost kind of sector or are we focusing some of that on some of the faster growing areas where we've got explosive? Yeah, I mean, it's a combination of going after new opportunities where performance is important. But clearly, in fact, I think it was Wikibon who said by 2013, 70% of the IT spend is going to be on the management of the IT. So that's still a very important aspect we have to deal with. The budgets are not growing at the rate and pace that data is growing at. So we have to solve both of those problems at once. Go after new opportunities that may be performance based, maybe capacity based, but we fully understand that if we don't help our clients solve the challenges around the efficiency and being able to optimize these environments so they're not having to try to spend at that same rate as the capacity growth, we and our clients won't be successful. And this is a huge issue that you guys are trying to attack this IT labor problem I call it. Where two thirds of the spend in IT is on people. And we're supposed to be automating all these tasks. So with the data growth where it is, that just can't continue, John. Yeah, and you had an initiative a few years back called Autonomic Storage. This is different from Autonomic Storage. Yeah, well I think what we announced around smarter storage is really about several things. It's efficiency to help with those problems and efficiency that's built in and automatic and not needing as many resources to be thinking about it. It's also about self-optimization. So understanding workloads, understanding the performance needs. And again, using the deep analytics skills and math skills we have in IBM to deploy that. When I think about some of the growth opportunities in big data and data analytics, you're very close to the applications. And you're also very close to the business of your customers. So if you're an IBM customer, you're really, really, IBM can be really, really close. How does that sort of drive your ability to differentiate in terms of selling the whole solution, selling storage or designing solutions that are better business problems? Well, I think it allows us to differentiate on several levels. First of all, we run some of the largest data centers in the world, in IBM on behalf of our clients. As an infrastructure outsourcer. As an infrastructure outsourcer. And a lot of that's running on IBM gear. A mix of gear, frankly, because what we acquire through those... Do you pull their stuff in? We pull their stuff in. So there's a lot of experience we're gaining from running some of the largest data centers in the world. So sand volume controller, as an example, would be a wonderful tool for you to drive efficiency into an environment if they hadn't been using it and you want to leverage those. It's a wonderful tool for our strategic outsourcing colleagues to leverage, to drive efficiency for their clients. At the same time, we also have very tight relationships with our software group colleagues. So we work with the streams organization, the analytics teams and software group. How do we refine, based on an experience from our services organization, refine that linkage and integration point we talked about earlier to make sure we're providing the most value to our clients end-to-end across all of IBM's both software and hardware components. And how does that drive you as a company in terms of your, and as a business unit owner, how do you, how does that inform you through your both R&D and your acquisition strategy? Because you got some competitors that are paying big coin for companies that are, you know, relatively mature as a startup. I'm just looking at the 2.4 billion that HPE paid for three par and you look at, you know, the 2. something billion that EMC paid for data domain. You've made much smaller acquisitions earlier on in the sort of formation growth of the company. Can you just talk a little bit about that? Sure, well, I think it's a good observation. I think our software organization is very good at that. I think we get a lot of insight early as to where our gaps are emerging opportunities is maybe a better way to say it in our business models. And I think we have a very refined process that allows us to identify some of those companies very early in the process and make strategic moves ahead of when some of our competition is even thinking about it. But more importantly, we're making huge organic investments in IBM through the six billion we spend in R&D every year. So we can leverage that six billion in R&D spend, I think, in some very unique ways. And a lot of what we do is homegrown. And again, it comes back to that integration we talked about and then using acquisitions because we don't create all of the best IP in the world and building out richer and more complete solutions through that acquisition strategy. We have a lot of conversations on theCUBE as to who's the best at acquiring companies. IBM obviously is right up there. We always throw at IBM and Oracle. IBM is very disciplined. And it doesn't seem to go chasing companies at auction. Yeah, don't get into bidding wars between volume server vendors as an example. You know, at the same time, at the same time you see a company like EMC that does really clearly goes after bidding wars. Excuse me, and it doesn't have your track record, but it has some clear successes. And so the acquisition versus R&D discussion is always interesting. I always like to ask, and I'm gonna ask and I can almost predict what the answer's gonna be, but what's a better investment? Is acquisitions or R&D? It depends on the use case, right? You knew the answer, right? I think it's consistent with what we just talked about. So obviously the core strategy is our organic investment. But to your point, I think we've gotten good at acquisitions and we use those to embellish, improve, enhance our capabilities. And it's all about delivering client value in the end. Right, right. So I'm gonna talk about the messaging at the, I guess we don't have much time. Real quick, so we've got smarter storage, efficient buy design, cloud agile, good high level messages. You started to talk about some of the examples beneath them. Is this really the roadmap that you're gonna put forth in terms of the portfolio over the next two to three years? It is, it'll influence my investment decisions. So we will use these attributes as kind of a key lever that will inform what we're doing in our development plans. We'll be able to describe them that way. There isn't clean boundaries between any of these attributes, but clearly based on the 20 plus innovations we're announcing here today, you'll start to see common threads in how we're approaching our portfolio and how that translates then into value for the client. So last question is what really excites you? I'm growing hair. I'm growing my hair too. I'm thinking about doing the St. Baldrick's thing. Are you? Yeah, I've been challenged to do it on theCUBE. I was gonna ask you to deal with me, but you're already there. Really, seriously, what I'm really excited about is the energy and excitement from the clients we have here at the Edge Conference. So I'm always energized by the time with clients and our business partners. So that truly is exciting me. And I'm just happy to be here and happy we're going to be able to provide the agenda we are for our clients the next several days. Excellent. Brian Traskowski, thanks very much for taking time out. Thank you. Come on theCUBE. It was really a pleasure. Thanks for having me. Nice to see you guys. Thank you very much. All right, get it right there. This is theCUBE and we'll be right back live from Orlando. This is IBM Edge. This is theCUBE.