 From around the globe, it's theCUBE with digital coverage of IBM Think 2021, brought to you by IBM. Welcome back to IBM Think 2021. This is theCUBE's ongoing coverage where we go out to the events, in this case, virtually to extract the signal from the noise. Now we're going to talk about one of the deepest customer relationships in the tech business with Pete Bill, who is the IBM Managing Director for American Express. Pete, great to see you. Thanks for coming on. Thanks for having me, Dave. So as I said, this is one of the deepest vendor-client relationships. I mean, it's more than that. It's just you're not a vendor, you're a partner, very deep relationship. Many, many decades, plus executives know each other. There's been some senior executives from American Express, as I recall, came over to IBM, of course, famously, Luc Gershner. But talk about the, just give us the overview of the evolution of that partnership. Yeah, well, as you rightfully mentioned, the relationship is long and deep. It's over 100 years. I mean, the original deal was probably around the buying clocks and scales and all that kind of stuff, and it evolved over time. But what it does, indeed, create is a long, deep, lasting relationship, as a fundament for doing business. And yeah, that business has gone through a lot of cycles over the last decades, as you say, from buying stuff. But I would say over time, evolving really into a partnership around services, mutual business back and forth, exchanging executives on the board level, American Express executives on the board of IBM and Pfizer-Pherson. So yeah, it's a very, very deep, long relationship of two iconic companies in Manhattan. Yeah, well, so it's got to be more than just buying stuff, obviously. Yeah. There's a lot of business being transacted, but your title has American Express in it, so you've got to intimately understand your client's business. I mean, I guess that's always the case, but we're taking it to another level here, aren't we? Yeah, yeah, absolutely. I mean, so what you really are after and what we do as IBM is really get into the shoes, basically, of American Express trying to support their business to their clients. So American Express is very focused on small and medium business, so we tap into how can we help the small and medium business as part of the American Express Custom Set and how can we help evolve their business models, their technology, their services to serve their clients better? Because in the old days, indeed, to your point, it was like, oh, we wanted to buy the right stuff and then we used that to do our thing, but the technology today, the area in which we operate is completely different. If you don't understand the client of American Express, we cannot serve American Express as a company. So it is indeed very important and it is therefore deeper and it requires way more focus on the clients of American Express than in the old days, I would say. Well, the pandemic must have been a challenging environment, of course. I mean, people aren't out shopping as much, although, you know, people are waiting, they can't wait to get back out. They say, it's gonna be like Woodstock with the American Express cards, but so maybe talk a little bit about how you work together during the pandemic. Yeah, so, well, first of all, like anybody, we all work from home, but American Express really, I would say almost re-engaged on what is core in this strategy is the support to small and medium business. So American Express started this stand for small initiative led by Steve's query himself about how can we enable the small enterprises in doing business in the COVID period? What do they need? I mean, yeah, they need money, but they also need help, like how to deal with your financials, with your people, can we use the spare time to do more education? And so IBM was one of the partners that jumped on board immediately to say, okay, let us help in that platform, support you when necessary with a platform, but definitely help you in that platform to reach out to the small and medium enterprises, specifically in the New York area. And like many other partners, we all got on board. And I think it got another focus again. I mean, small and medium businesses always been a focus, but it's different when so many companies are struggling right now. And so we get on board. And I think that that is really a very clear partnership expression, I would say. How do you measure success with American Express? What are some of the key things that you guys look at? How have you evolved that over time? Well, ultimately, I would say it's client satisfaction. In the end, it sounds like an open door, but it really is. I mean, the real measurement, I mean, there's always money measurements back and forth. You can argue that that's, of course, you need to do solid business. There's no discussion there. But I would say it's where do we align on the strategic intent from both companies? And let me elaborate a second on that one. If American Express is really transforming its business to become way more, I would say, cloud-enabled hybrid technologies enabled, we provide a lot of that material. So we are really working together on trying to leverage each other in building that hybrid platform that will enable that future. And why do you need that? Well, because American Express needs to be dynamic and getting fintechs on board, getting exchanges with new companies going way faster. It's not the traditional old style anymore where you could go for transformations for years. No, it needs to be on the spot. So our strategies are really well aligned. And I would say the real measurement of success is how can we now make that to the benefit of American Express? And on the back of that, we will do good business. So client satisfaction should be the primary one, strategic alignment important, and then of course doing the sound business on the back of that for both sides. Financial services firms have always been pretty savvy when it comes to applying technology to business, some of the most demanding customers and more advanced. And so, you know, American Express was likely already on a digital transformation prior to the COVID hitting. At the same time, we talked about it being accelerated, but I think what people miss is that it wasn't, well, they don't miss it, to think about it in this way. It wasn't planned. It was like forced. And so you just, you had no choice. You couldn't think about it, you just had to do an act. And so on the one hand, okay, that's good. It was a forcing function. It also served as a p-tree disk. But on the other hand, I'm sure a lot of mistakes were made. Now as we exit the pandemic, step back and say, okay, wow, we learned a lot. Now we can make a more planful approach and really go deeper and lean in over the next several years. What are your thoughts on that and how does it relate to what you guys are doing with American Express? I think that's a very good point. I agree. It's what you see is that this indeed has forced us in a lot of things. I mean, I think the good news is American Express was already enabled for a lot of that new technology. They have invested, they have a lot of very skilled, good people and a very clear strategy on what they were after. This indeed put more pressure on it. I think what you will see happening in the foreseeable future after we get out of all of this is that let's say the urgency to complete the transformation on cloud and data will become even more crucial and so the priority will become higher. And it will not be just higher because of the techies wanting it to do it but because the business needs it. So they're needed from a risk perspective. They needed from an agility perspective go to market of new products. They need to really move fast. It's a fast moving market. You get a lot of, I mean, the competition is there. So to enable that, the move to get new technologies in faster is becoming pivotal and crucial. And I think for now it's more of a, almost like a survival statement. We need to get through this bubble of COVID. As soon as that's done, we need to think way more on the structural elements of that and how we enable an hybrid strategy going forward. So in the spirit of, you need to understand your customer, in this case, American Express and understand their business. And American Express is, I'll make you laugh. Anytime I call American Express, if I have to work on a problem or whatever and I got to talk to customer service, they always thank me for my loyalty because I haven't a customer for a long time. You know, probably Ronald Reagan was president was my first AMX card. And so they're like, oh, thank you, Mr. Volante. We really appreciate your loyalty. So loyalty is a big thing for American Express with its customers. So what about IBM and American Express? How are you breeding? You know, what's that loyalty factor look like for you guys? Yeah, I think it's a very important element. I mean, to your point, I have the same experience. It's a crucial element. The whole, I mean, American Express is famous for its loyalty schemes, for loyalty as a company. I think loyalty, like the business has evolved, I think the loyalty evolves in the same style. And I would say in the old days, I would say the argument was, you need to have the best product. You know, you need to be, and then we'll buy the product. In the current environment, I would argue this, it's way more about skills. Do we have the right people? Do we have the right technology, strategy kind of stuff? I would say for the future, it's way more about do we have the right trust, commitment and loyalty of the people that work with us going forward to serve the client needs. And I think that evolution, it's almost like you have an industrial revolution. There was an information resolution. I think there's more of a loyalty revolution coming up, where the real differentiating factors is, because we can study this and argue this for ages, but a lot of parties will deliver a lot of good technology to the market. They will deliver a lot of good people. They will have good price points. So what's the real differentiating factor? It's like, do we really trust these people? And then I think relationship, loyalty will really come in play. And it will not become in play just between an IBM and an American Express, but I would argue it will come in play in the whole business cycle of American Express to their clients. I mean, if the credit card swipe of your American Express card in a shop fails, it needs to be my problem. If I deliver the service to American Express, it cannot be that, oh, American Express has a problem. And you know what? It's eight o'clock in the evening. Yeah, we have reduced services. No, we never had that. We will never have that, but we need to get even deeper in understanding what the effects are of these business issues. Yeah, I mean, you're right. The nature of loyalty, the, I mean, certainly the products have changed. I mean, I remember, you know, I used to travel overseas with American Express travelers checks. That was a staple of every overseas trip that I ever took. You know, no matter where I was going, whether it's Asia Pacific or Europe, I had to have that packet. And I had, you know, there were times when, you know, one time in particular, I had a problem, boom. They were right there. It solved that problem now. Of course, many young people in the audience don't even know what an American Express travelers check is. They probably don't know what cash is. Carrying around crypto in their wallet. But that's an example. And that's about trust. I trust that product. I trust that company behind the product. And again, that has to extend to your relationship, doesn't it? Absolutely. So the technology that an American Express uses, whether they do it themselves or whether it's provided by partners like IBM, it needs to be seamless. Because, let's face it, Dave, you would not be interested to know who provides you the security on your credit card. You have an American Express card. You expect American Express to deliver you the security that you need. And whether American Express delivers that or IBM, you couldn't care less. And you shouldn't care less. But what it does require is that in the old school, I would say it was more like, okay, we'll give some services and some products to American Express. And guys, good luck. Now we need to think ahead. And I think that's where the power of IBM comes in, where that we really are tuned by industry to the industry issues like compliance, security, stability, services, to the end client, to you. So you need to feel, if I cannot explain what I do to American Express in your terms as an end user of an American Express credit card, you can argue what's the real value at. And definitely if there's like three, four, five parties playing exactly the same game, it needs to be differentiating. And I think a company like IBM, we have differentiating value, but we need to make it very clear. And that's, I think, where you see companies like American Express really work together. And that's where loyalty and trust really comes in play. Last question we got to go is, you have American Express in your title, are other companies jealous? We want that too. They should be. No, but I must say, I mean, we deal with a ton of financial institutions, as you know, around the globe, including the other credit cards. But yeah, I think where these deep relationships come in place, indeed too, I mean, they're so old, so deep, so entrenched and it really starts, there's different dimensions to it. And it's not always that hard coded anymore. It's the subtlety of really relying on each other. I mean, when something happens in the middle of the night with American Express, all of IBM is on board as of the second. And it's not driven by contracts or by anything. It's by people that have an American Express logo on the forehead and work for an IBM. Yeah, right. That's awesome. Pete, Bill's great story. Thanks so much for coming to theCUBE. It's great to have you. Thanks for having me. All right, and keep it right. This is Dave Vellante, ongoing coverage of Think 2021. You're watching theCUBE.