 Live from San Francisco, it's theCUBE, covering Red Hat Summit 2018. Brought to you by Red Hat. Hello everyone, welcome back. This is day three of theCUBE's exclusive coverage of Red Hat Summit 2018. Live in San Francisco, California at Moscone West. We're out in the open in the middle of the floor here. I'm John Furrier, co-host with my co-host this week. John Troyer, co-founder of Tech Reckoning, advisory and community development firm. Our next guest is CUBE alumni, Kim Stevenson, senior vice president and general manager of the data center group solution segment at Lenovo. Ready to see you? Yeah. Hey, how are you? Thanks for coming on. So Red Hat Summit, Lenovo. Okay, how does that fit together for you guys? Data center obviously is cloud now, and you got on premise. We're both in Raleigh. You know what? You moved to Raleigh? What's the update? Where's that connection as fiber cloud is taking this world by storm? Yeah, so we're, you know, we're a great partner with Red Hat, and we're very focused on enabling that hybrid enterprise through a hybrid cloud. So one of the things that we've done, we do a lot of co-development, but one of the things is we've taken our systems management software, which is X-Clarity, and we're the first to embed that into cloud forms so that we can move assets, you know, public assets to private assets and vice versa. And that wouldn't be possible without working really closely with Red Hat, so. Oh, Red Hat's been very strong at support, and if you look at the Rale side on the operating system side, very reliable, it's had years and years of experience, but it's always been kind of, let's certify the hardware, but now that you have hardware at the baseline, moving up the stack, you have OpenShift, getting huge success, Kubernetes, now you've got multiple clouds, which has other hardware. Security becomes a concern we hear about, okay, security being on top of that's a really big deal. How does that change the game for you guys? How are you guys adjusting to that? Because it requires everyone to do more work, but now you've got automation playing role. Take us through that relationship between from the hardware all the way up to the stack. Yeah, and it is, it's the weakest link issue, right? That every piece of the solution has to be secure in its own right, and the solution has to be secure. Right, so we do a lot in the hardware environment through our supply chain. We have efficacy of every part and component that goes in, every piece of software loaded through manufacturing, the one of the benefits of having your own manufacturing organization. So we know what we give is a secure platform when there is ready to go, but then as you start to add the software, this is where things like containers become really important, and the ability to do monitoring of the environment without having to stop the environment. And so we have a lot of investment going in OpenShift, and we've launched recently a DevOps practice based on OpenShift to actually accelerate the deployment of more and more containers to again figure out the security by design versus security after the fact. The problem with monitoring is after the fact, you want to design in, and you need to rethink the application structure in order to be able to do that. Talk about Lenovo's strategy and innovation around enterprise and emerging tech because consumerization of IT has been a topic we talked about going way back many, many years, but actually the role of consumer hardware products is becoming more and more enterprise as IoT, for instance, becomes a critical piece of the network, whether it's you wear a bolster of humans or security camera on a network, the edge of the network is now the IoT device, but also the data center can be considered an edge, a big edge, right? So you have now devices everywhere that's not so much consumerish. It really has to be enterprise and cloud enabled. What are you guys doing in the innovation area there? What are some of the things that Lenovo is doing to move the needle on really making a seamless IoT edge secure and functional? Yeah, so one of the things, if you look back at the last 10 years of IT, right? We've spent a lot of time as IT organizations consolidating data centers and then basically getting rid of people in IT, right? The simplicity of an AWS and Azure stack has actually driven down the number of operational people in IT. And now you're hitting this wave where on-prem private clouds are becoming more and more important. It could be the analytic workloads, it could be your blockchain workloads, but the workloads that you want to keep on-prem and you're going, holy crap, I need a robust operational organization to actually make this come to life. So that was one of my predictions for this year was operational simplicity rises in importance. And our response to that from a Lenovo solution is to build fully integrated appliances. So we have fully integrated private cloud appliances based on Azure stack, based on Nutanix, based on VMware's vSAN, ready nodes, so that you can pick either at the software layer only or you can pick a fully integrated appliance where it's integrated in the factory. It's what I call rack and roll, comes with white glove support and you need far less operational people. And if you want to know, I mean it's mimicking that simplicity that AWS offers, right? So it's really an application team that now can manage this entire operational environment. So is that targeted towards folks who are transitioning to cloud operations? So one of the things about true private cloud is they're essentially rebooting their organizations to be cloud operations, essentially. That's right, yeah. And so they want that plug and play, if you will, I hate to use that to old term, but just out of the box and then it becomes a resource on the network. Yeah, well everybody says, they say the hardware doesn't matter. Well, it matters, you know, because it's what makes everything run. But what they mean by that is they don't want to mess with it. They don't want, it needs to be a no fuss, no must. It needs to be there like a utility, but not have to have the resource dedication that used to exist where I needed storage admins and database admins and server admins. That level of monitoring and management has to be abstracted to the software layer and you have to then be able to integrate your resource components to be able to do that and look at it as a system, not as a component. And that's where we're headed with our strategy. Yeah, that's a great consumption model, right? An increasing part of the market, converged infrastructure, hyper-converged infrastructure. You know, like you say, rack and roll. Rack and roll, I like that. But the hardware does matter, right? A few years ago, we were just, you know, if you'd listened to some people, you know, it was, we were going to be inside public clouds with some sort of undifferentiated pool of X86 servers out there, but it turns out the actual hardware and the integration pieces do matter. John mentioned IoT, you know, AI, we've seen some examples of it here at the show, real-world examples. And then for that, hardware really starts to matter well. Can you talk a little bit about how Lenovo's looking at some of these emerging tech? At the beginning of the year, we formed an IoT division specifically to focus on IoT, and it really is bringing the edge to life. That's the mission of that particular organization. And so we see sort of the remote office, branch office concept that, you know, has long since, I mean, that goes back to AS 400 days, right, that you had branch office computing, but reinventing itself in a modern way into these edge servers that can be ruggedized for, you know, we have edge servers in windmills, as an example, to manage and monitor a windmill farm, right, to optimize generation with windshifts, those kinds of things, but it could be a closet, right? And it- It's not a data center. It's not a data center is in a physical construct of a data center is in the functionality provided, it is a data center. And so we have from our PC group, one of the things I'm pretty interested about is we have these things called stackables. So they're about, you know, five by eight inches of a PC, and then you can magnetically connect a battery to a magnetically connect a projector to it through magnets, and you can get basically a stack of computing power. So we've looked at that from our PC colleagues and said, huh, that's the future of the edge, but it needs to be Xeon class, it needs to be enterprise manageability, right? And so it won't be five inches by eight inches when we're done, right? But it will use some of that IP in the stackable nature that will allow you, then I can put that stackable unit on the back of a television monitor for a smart display, I put it back on a kiosk or a vending machine, or, and now all of a sudden, now I can get a really different customer experience at the edge, and then I can parse data, maybe I don't need that data to go back to the cloud, maybe I do need some of that for, you know, machine learning capabilities, I want to create big data sets back in the cloud, you can create that level of intelligence at the edge, and parse the data to where you think the appropriate destination for that data is. How important is the IoT edge for you guys, and what should customers who are trying to merge cultures of OT operational technology with IT? Because now you have IP devices, which, you know, creates a security potential, but there's now policy involved, you got to write software apps for, you got unique use cases, talk about the importance of the IoT edge for Lenovo, and what customers should be thinking about when they architect. So, you know, my starting point is every piece of equipment becomes an IP-enabled device that will generate and collect data. You're going to have to figure out how to use that data, right? I said to our facilities leader not too long ago, I said, what, I pointed the table, conference table we're at, what do you think this is? He's like, ah, it's a table. And I'm like, no, to me, this is a smart table. It could be connected, IP connected, and we could, you know, figure out, is it the right, you know, value for this particular room? And you could just get into these crazy things. Some won't make sense, some won't make sense. But basically, I think every company is looking at how do they make their products and services smart by wrapping them with IT-enabled services. So that creates a new edge. We used to think of endpoints as PCs and phones. Now they're cars and, you know, anti-forma transportation vehicle, they're windmills, they're, you know, semiconductor equipment, you name it. And that is sort of the new, that's where we are trying to attack from the IoT perspective. What we're trying to help customers understand is it's that data collection, use case analysis that will enable them. One of my favorite examples is Ford has a prototype product. It's not a car, it's a baby crib. Now why, right? So through autonomous driving, they collect a bunch of data. Everybody knows that when new parents have a cranky baby in the middle of the night, what do you do? You put him in the car, you take him for a ride, right? So this baby crib mimics the motion of a car, mimics the sound of an engine, and mimics the street lights. It's no more taking your baby for a ride in the middle of the night. We've all done it. Yeah, we've all done it, right? And this is why these endpoint devices collecting data to figure out these new products and services. And I just think whether they ever bring that to market or not is not the point. It's new experiences. It's a brilliant idea and gives you a really good illustration of how creating these smart enabled endpoints will allow you to generate new business opportunities. That's been a real theme here at the show, getting beyond the technology, right? To be transformation is kind of a buzzword, but I loved that they didn't put a huge amount of tech on stage. They really did talk to the people here, attendees, about look, you've got to step up. You've got to have new ideas. You've got to affect the business. How are you, as you talk with both of the customers and inside Lenovo addressing those kind of a transformation and business ad. Yeah, so like I said today, and I really believe this, there's a new mandate for IT. The table stakes of keeping the business running. Of course we have to keep the business running and running well, right? But really, every IT leader should be thinking about how do they redefine the customer experience for their organization? How do they drive extreme productivity through AI and blockchains? If there's, companies today are extraordinarily inefficient. We all live in a company and we can tell you it's inefficient. But you now have the ability to affordably drive out that inefficiency through this level of extreme productivity. And then there are, everybody needs to be thinking about the future of the company. What are you in the business of and how does that, how do you wrap those with new products and services, whether it's adjacent markets that you're going to create or it's enhancements of your existing product. So you can reach new customers, new markets. And that's a far more interesting role for IT, but you can't give up the ship either, right? You cannot let operational performance decline while you're operating on the new mandate, which is why new operating models for IT and the hyper-converged infrastructures and- Containers have been a great help there too. Containers, right? We just have to fundamentally re-architect so that it's easy to actually drive change into the flawless change into the enterprise. And the volume of change for our future is twice as great as what we've experienced in the past. And if you accept that as a premise, you'll rethink how you've done your architecture and how you promote code into production and how you manage that code going forward. We always love having you on the queue because you always do predictions. So I want to go back and get some predictions from you. What's your predictions next year? What do you see happening? Oh, by the way, you all have been right in a lot of their predictions. So let me go back, we have the tapes. We can go back and look at the video and say, ah, see you're right on that one. What's your predictions this year? I mean, obviously you've seen a lot going on. We're talking about here on theCUBE seeing what's going on with Kubernetes, containers, OpenShift, that a new internet infrastructure is being recast with compatibility modes with containers and Kubernetes for orchestration, cloud scale, you talk about IoT edge, a new infrastructure, an upgrade is coming. So there's a lot of things happening. So what's your prediction? What's going to happen over the next year? So I actually believe this is the first year that we have human capacity and IT organizations to reinvent the enterprise structure which comes led with an enterprise architecture discussion. We've been moving workload to the cloud, SaaS applications, infrastructure as a service. And that is now absorbed enough into that you can stand back and look at it. So I do believe that, I call it data centers go micro, that the era of data center consolidation is over, that there will be more data centers, they just will be micro data centers because they will reflect the edge of every company and those end points aggregation that you need to do to figure out what your data analysis is going to be. I also think that the operational simplicity that operating models are going to be redefined as more and more private clouds get deployed. The structure of an IT organization is typically looks like this. You have four basic functions. You have IT engineering, IT operations, application development and applications maintenance. That's typically the structure. I think you're going to see a collapsing of that. There actually is no reason for four independent functions. You need to organize by line of business and the business outcome you're trying to drive and workers are going to need to be more versatile in terms of being able to span. You're going to abstract a lot from the infrastructure. So you need to be able to manage at a higher level. Therefore you can't organize in that discreet manner. And I think you'll start to see that come to life. It's horizontally scalable. Sounds like horizontally scalable people, yeah. You've been a CIO at Intel. You had a lot of ride roads, you found some boards. You're now in an executive role at Lenovo. You're managing products and get your responsibilities, building, shipping and business performance as well. How has your role changed? You've been there for about what, a year and a half? Just about a year. Just about a year. What's the energy like? What are you bringing to the teams? What's your vision? What's your to-do list within Lenovo to take it to the next level? Yeah, so when I started with Lenovo because I considered Lenovo the underdog in the data center industry which was going through phenomenal change, right? And so the underdog has the best opportunity to capture hearts and minds and share when the industry is going through change. And so that's what attracted me. And it's been true. We organized about this time last year by customer segment to serve the unique needs of our customers in terms of hyperscaling customers, high-performance compute and enterprise both at the software-defined and traditional layer. And in that one year, we've won six out of the 10 top hyperscalers in the world from zero to six in a year. We consider that to be great. And we learn so much from there that they're doing a lot of customization and they're two, three, four years ahead of what the general enterprise will consume. And so we're able to take that and pull it back into our private cloud deployment strategy into our enterprise software management and strategy because we see what they're doing and use that as a virtual cycle of life. And we've got a lot of momentum in that area and our employees are just excited about how much progress we've made in a year. And I would say if you pulled 10 of them, nine out of 10 would have said they wouldn't have believed they could make so much progress in one year. And that's a good feeling to have. Now, there's more work to do. Yeah, you have product leadership, you've got some great products. It's now just focus and getting on the right wave, right? I mean, because the industry is changing. So you can move the needle big time. And we've chosen, from a software perspective, we've chosen a deep partnership model with Red Hat as one of the partners. And so if I look forward and I would say, look, we're going to have to go deeper and partner more broadly across the ISV sphere to continue to bring these tightly integrated appliances and simple cloud deployment models to the market. And that's what you'll see us do next. Well, it's exciting for you and congratulations. And they're lucky to have you. And we know from when you read Intel, you've seen the playbook. You know, there's a lot of change going on. So great to see you, congratulations. We certainly love Cover and Lenovo, a lot of great action. Thanks for your support. And thanks for coming on, sharing your insights here in theCUBE again. Appreciate it. Kim Stevenson here inside theCUBE for Red Hat, Summit 2018, live in San Francisco. I'm John Furrier with John Troyer. We'll be back with more after this short break. Often times the communities already know about a facility that's a problematic because they smell it, they see it. But again, they don't have the evidence to basically prove that whatever's happening with their health is related to that facility. If you have a low-cost instrument that's easy to use, then all of a sudden, science becomes something that everyday people can do. Hi, I'm John Furrier, the co-founder of SiliconANGLE Media and co-host of theCUBE. I've been in the tech business since I was 19, first programming on mini computers in a large enterprise, and then worked at IBM and ULA Packard, total of nine years in the enterprise. Bri has jobs from programming, training, consulting, and ultimately as an executive salesperson. And then started my first company in 1997 and moved to Silicon Valley in 1999. I've been here ever since. I've always loved technology, and I love covering emerging technology. I was trained as a software developer and love business. I love the impact of software and technology to business. To me, creating technology that starts a company and creates value in jobs is probably one of the most rewarding things I've ever been involved in. And I bring that energy to theCUBE because theCUBE is where all the ideas are and where the experts are, where the people are. And I think what's most exciting about theCUBE is that we get to talk to people who are making things happen. Entrepreneurs, CEO of companies, venture capitalists, people who are really on a day in and day out basis building great companies. In the technology business, it's just not a lot of real-time live TV coverage. And theCUBE is a non-linear TV operation. We do everything that the TV guys on cable don't do. We do longer interviews. We ask corporate questions. We ask sometimes some light questions. We talk about the person and what they feel about. It's not prompted and scripted. It's a conversation. It's authentic. And for shows that have theCUBE cover it, it makes the show buzz. It creates excitement. More importantly, it creates great content, great digital assets that can be shared instantaneously to the world. Over 31 million people have viewed theCUBE and that is the result of great content, great conversations. And I'm so proud to be part of theCUBE and a great team. Hi, I'm John Furrier. Thanks for watching theCUBE. One of the community's goals.