 We're live in San Francisco for the Red Hat Summit. This is Silicon Angles theCUBE, our flagship program. We go out to the events and expect a signal from the noise. I'm John Furrier, the founder of Silicon Angles. Joe, my co-host, two mini-man analysts at Wikibon.org. And we're here with Scott Perth, Director of Software Defined Environments with IBM. Welcome to theCUBE. Thank you very much, glad to be here. We're looking forward to this IBM impact coming up. We'll be broadcasting live at that event for you guys. But here at Red Hat, it's really interesting to see IBM up on stage talking about their 10 years in support of Red Hat. It's really, that's the IBM way. We also had Intel on earlier talking about just the role of you guys and Intel others. It's just been historic, really. You look at how open source has evolved from being geeks and being contributors in the computer industry to going from a cheaper alternative, enabling innovation to full-on tier one viable innovation. I mean, this has been to a whole other level. So, one, congratulations. What's your take of the show? I mean, 10 years, I mean, do you feel the same way? Is it exciting? You still got a spring in your step? I mean, what's going on? Well, what's fun about this show is it does bring together the experts in the world of open source and open source technology. You know, as you said, we all remember 14, 15 years ago when Linux was almost a toy on a laptop. And we made a strategic decision. We're going to invest, our famous statement, invest a billion dollars in Linux back in 1999 in year 2000, and a lot of controversy, believe me. You know, you're going to invest that much money in something that was very uncertain. But we believed at the time that the industry was headed in a fundamentally different direction where the speed of innovation was going to come not just from one company, but from the collaboration of many, many companies. I think IBM is one of the things that I point out to folks out there that might not know the history. IBM always makes some good calls. They pretty much makes more of the right calls than the wrong calls, and it's pretty obvious. And even this year was ironic, at the same time you're celebrating your 50th anniversary of the mainframe. And we had the folks on from Intel, we had Cisco on it. This whole systems is coming back, right? So like the operating system with Linux expanded out to the cloud. You're seeing the old school come back. And what you guys did with Linux with that billion dollar investment really set the market informed. And at the time you had competing servers, quite frankly. And so now that's now the same thing. Now you got OpenStack. It kind of looks the same as Linux. There's still that, we're still waiting to see that come together. It's like Jell-O in the refrigerator, right? At some point it like comes together, you know? So what is that next move that you guys see in the cloud around OpenSource? Is there going to be a catalyst moment? Is there going to be evolution? What's your take on that? Well, you know, one thing about OpenSource is it does evolve, it continues to evolve. OpenStack is a great example of the community taking the OpenSource move into the next level. Figuring out now how to make things easier, how to automate data centers. The buzz is all about cloud, right? But you ask 10 people what you mean by cloud, you'll get 10 different answers. My definition of cloud, it's a way to transform IT. So you need two walls to transform IT to make things easier, simpler, more accessible by the end users. So when we focus on technology, we focus on applying technology. You know, I'm an engineer by training. I love to talk about technology, but frankly, when I talk to businesses, they want to know what's it going to do for me and my business? What's in it for me? Right. And that's a discussion now about OpenStack. Great technology, but how's it going to fundamentally help my business? It's going to make things happen faster, more quickly. We talk about businesses being agile, being able to make decisions quickly. Well, how do you do that? How can IT help that? No longer do you want to be able to call up the IT guy and say, I need a new application, because I'm a retailer running a price promotion. I need to spin up servers. Okay, I'll get that for you in six weeks, right? So we were talking yesterday about the DevOps movement, how that really catalyzed this new software paradigm. And we were commenting that, the myth of cloud replacing everything in the data center is really kind of just a myth. Can you explain, just from your experience and from IBM's perspective, the role of the data center in the cloud. They're not usually exclusive. I mean, they work together. That's what we're hearing from customers. Absolutely. Can you share your perspective on that myth of the cloud replaces the data center? Well, you think of cloud and the data center as being a continuum, not being two separate thoughts. Companies really focus on data today. They have data for their customers, data for their employees, and critical financial data. And they have to figure out what are they going to do with that data? They're going to make business decisions. They're going to take action on the data. The difference between a data center and cloud is, we're going to take action and make business decisions. If you're comfortable in having that data be in somebody else's infrastructure, it's an easy decision. You can go try some things, but many large companies now are saying, you know what, I want to secure my information and keep it in house. So our role now is to make that spectrum continuum where it's easy to move back and forth. What makes sense? Scott, your title is very interesting. When we kicked it off, your title is Director of Software-Defined Environments. Yes. So obviously Mark Andreessen wrote that seminal Wall Street Journal article, Software Eating the World has been quoted zillion times. We love talking about software-defined everything. Right. You got internet of things. Cisco calls it internet of everything, whatever. But software now is a key part of the value proposition. So what does that mean, software-defined environment for me? What's your job? I mean, is it just anything that touches software? That's everything, right? Well, it really is. And you know, it starts to me at the data center at the resource level. How can you make the compute resources, the storage resources and the networking resources work well together and be very efficient? I work with businesses and one number one question I get from IT guys is, I have to go to my CFO and justify an expenditure. And the last time I went in, he explained to me, hey, you just bought something and he asked my utilization. It's 10%. Why don't you use up the other 90% before you come back asking for more capital, right? So by providing software management- So you need to get the P.O. through or what? Well, see this is the trick. Go back and use your 90%. If you can demonstrate how to better manage resources in a cost-effective way, CFOs love that. Business leaders love that, right? You can do more of what you have. And what we've done with our promise of software to find environments, we built it in. We talked about the mainframe being 50 years old. Well, that's the core of the mainframe value proposition. You run a mainframe at 100% utilization. People turn on their mainframe, run at 90% to 100% utilization for five years or more, right? It just never stops. So the promise of software to find environment is how do you now bring out that value to the rest of the data center? The other thing that software to find environment is, is how do you make your infrastructure smart about applications? See, many other companies talk just about the resources, talk about virtualization, but very few talk about the workloads and talk about the applications. So are we living in a world that's a software mainframe? Yeah, think about it. I mean, think about it. The cloud, you're talking about a continuum, you're talking about resources. Yeah, think about it. I mean, it's one big mainframe. Right, you think about it. Well, the differentiation for the mainframe, what makes it popular even today is it's very tuned for specific workloads. And from an IBM perspective, the IT is all about the workloads and about the resources. And the software to find environment is how do you marry it to? How do you manage it? Not having one monolithic system for one workload, being agile or flexible to saying, I can deal with multiple workloads and open. So open software mainframe is now the new world. Yeah, so when I hear you talk about the efficiencies of what's going on there, Scott, I mean, I think back to virtualization. IBM was an early embracer of server virtualization, helped increase infrastructure efficiencies, say going from 10, 15% up to 30%. On the storage side, IBM SVC is one of the leaders in storage virtualization. Kenny, parts for us, what's the difference between are we just extending kind of the infrastructure virtualization that I was doing before, or is there something fundamentally different with the software to find environment? Yeah, Stu, that's a great question. And in fact, I've been with IBM more than 30 years. And my first job was writing microcode or firmware for virtualization, server virtualization. So, many people think virtualization... And they sound like Paul Cormier, yesterday talking, he was like, we can work from Jack, he's like, I wrote microcode. Yeah, exactly. The mainframe did everything first, we know this. So the idea of virtualizing resources becoming extremely efficient. You start with the servers, right? We're well down that path. As you mentioned, storage virtualization, software defined storage, having highly scalable and elastic storage, very popular, network virtualization, right? And how do you tie all that together? So it's extending that, but then adding new ideas and new concepts. How do you take the workloads and the applications themselves and them self provision the resources? How do you automate that? How do you use technology such as patterns, such as you see built into OpenStack to be able to automate the provisioning of applications and workloads? Okay, and can you talk about how that fits in with what you guys do with Red Hat? Well, Red Hat's a great, very, is an excellent partner for us. As we see in all our systems, Linux runs across our entire portfolio. And we've been on the journey with Linux with Red Hat for a long, long time. And that's one of the great things about being here. So whether it's Linux applications, you're running hundreds of Linux virtual machines on a mainframe or we have customers running thousands of virtual machines, Linux virtual machines on a mainframe, or customers doing high performance or data analytics on our power systems, as well as just running core Linux applications on our Intel based systems as well, right? So Red Hat's a great partner, not just on the Intel systems, but across the entire space. And that's what our customers are looking for, is a partnership that then they can rely on having an integrated approach. So they work with IBM, they work with Red Hat. We talk about the same things. We talk about applications that run on Linux, making things easier to manage, easier to run. So that's the real value that Red Hat and IBM provide together. Okay, so OpenStack, obviously, has been a big discussion here. IBM has a strong commitment to OpenStack. Can you say how does the IBM and Red Hat, the vision for OpenStack and distributions, how do those fit together? Yeah, if you see the folks who saw the keynote presentations, one of the things that popped out is the number one and number two contributors to the OpenStack distribution are Red Hat and IBM, right? So we both are putting a lot of emphasis on OpenStack. What Red Hat's doing is they're providing a complete top to bottom stack, including marrying OpenStack with their Red Hat Enterprise Linux, right? And providing easy to use, easy to install basis. IBM is also using OpenStack as a core technology for some of our offerings. Our smart cloud offerings or our IBM cloud offerings is depending on the naming of the different products to provide a package, self-contained product that can be used to manage cloud-like infrastructures. That can run on a Red Hat Linux, it can run on somebody else's Linux, or can run on our version of UNIX, AIX, can run on other operating systems as well. So we view our partnership, the integrated stack with Red Hat be very strong for specific applications where that's our customer wants, but we also offer pre-packaged versions of OpenStack as well. Okay, I was listening to the CTO of Red Hat this morning talking about cloud in general, and he said, did the kind of artificial slicing of the cake of infrastructures of service, platform as a service and software as a service shouldn't be there anymore. It really saw a blending of the infrastructure and the platform layer. Obviously, IBM has a lot of options for the application layer. I heard at IBM Pulse, IBM has over 100 SaaS applications, launched BlueMix for the platform as a service. What did you think of that statement? Does that ring true to you? It really is. In fact, when it sometimes confuses businesses when we talk about the artificial layers, they want to talk about the business. They want to come at it from a business perspective. If you're an R&D executive or you're a marketing executive, they want to know, how can you help me move my business forward? And I don't necessarily want to know what's under the covers or behind the curtain. So, IBM, you put the pieces together and if you want to artificially label them at different levels, that's fine, or the industry does that. All we want to know is in the end, do we have a workload or application or a business service that meets our needs? So, it makes it convenient if you're talking to technology-oriented folks to break it into those layers, but more often we're talking to the business folks who want to know, hey, how do I get my business service up and running more quickly? So, talk about the, you've been in IBM for so many years, so you have a lot of history. So, you've seen the evolution of IBM from the old Tom Watson generation and then obviously they had the big, no layoff policy, just kind of a history lesson here and then they had the big turnaround. And then since then, IBM has really throwed themselves out to be on the front end again and kind of rebooted the old, but they never lost their DNA. IBM still do great research. I mean, Watson is just incredible. We've covered that like a blank and we just enjoy all the innovation coming out of IBM. Okay, knowing all that history, we're back to the systems game. So, what's your perspective on this future operating system? I mean, what Red Hat has done with the OS with Linux certainly enabled a lot of innovation. Now we're in some say the biggest tech bubble. Some has ever seen certainly valuations on the consumer side are crazy, but now on the enterprise side, you're seeing a recasting of environment. You're seeing retooling, extensions, big data, social data, complete instrumentation with software. So, as everyone starts putting these new software paradigms coming in, what is the big enabler in your opinion in the software environment that you're focused in on and saying that's the most important areas of disruption? What are the top three in your mind that are moving us into this new era of cloud and mobile and consumer experiences? Well, it's a very timely question and you talk about the evolution of IBM over time and you're right, I have seen changes as things have shifted and changed. But one thing, no matter who from IBM is sitting in this chair, they'll tell you that we've oriented the company around three main themes and it's not just the systems team. It's our software development team, our software team, as well as IBM services teams. It's all about three things. Number one, data. Our CEO talks about data as a national resource, right? So think of all the data that a business or an organization needs to handle. Whether forecasting coming in to predict how many products you're going to sell or whatever. Pick your industry and you're handling just petabytes of data, right? So think of it as a natural resource. How do you turn that resource into something productive, right? How do you turn the petroleum into gasoline or turn it into the plastic in the microphone, right? How do you turn that data into something that's useful? So we've oriented the entire company to think about data and from a systems point of view and a software point of view, how do we support all the initiatives that my services team and our software team does? How do we optimize, I mean, with flash storage for speed or mainframe for throughput? How do you handle the data? The second one is cloud. I mean, we talked about cloud. Mentioned the transformation of cloud. It's really how do you transform your IT now to make it much more efficient? So we've oriented the entire company to talk about how do we build our systems to support the cloud initiatives across the board. And the third one is businesses are engaging their customers in new ways. You talked about social and mobile. Just how do you help businesses talk to their customers to be more successful? You know, with the onslaught of mobile devices and laptops or whatever. I don't know what's going to be in five years, right? But the whole idea, this whole idea, we call systems of engagement. How do you engage your customers? How do you build that infrastructure, right? So when we're designing systems and the software that runs on them, we focus in those three areas and make sure they're tuned. So when our service teams team go out and talk to senior executives and company, they say, listen, we're going to help you mine that data and get value out of it. And don't worry, our systems are performing. I mean, we hear a lot. Yesterday, Kino, we heard someone say, SLA's of the future will be guaranteeing outcomes. So I never heard that before, right? So we're in this new era. You've never heard it before. I mean, I think the mobile phone and social has changed the equation. So I think what you said is legit in the sense that's a North Star for the customer. That's where we're guiding to. Now let's get back to reality, right? So reality is we're at the pregame of this. So let's take OpenStack, for instance. There's a lot of talk about the stacks. Where as a software-enabled or software-defined environments are key to this, there's a lot of reconfiguration going on and up and down this new stack. Some have different approaches. There's different workflows. So there might be multiple stacks. What is, in your opinion, the most important areas that are being worked on today? I don't want to say that are unbaked or not baked, or that are being baked out, that are important to watch. Right. Well, I think the core technology of OpenStack is fantastic. The fact that you can manage a variety of servers, server types. You can manage object storage, file storage. You can manage a variety of networks, right? All from a common OpenStack approach. We found the missing piece so far has been the workload perspective. How do you schedule the workloads and schedule the resources? OpenStack just has a primitive way of doing it. So what we've done is we've created our own scheduler. We call it Platform Resource Scheduler that we launched earlier this year. That provides, we actually built it for supercomputing, to schedule workloads across advanced grids. And we found out that was a natural. If you connect it into the OpenStack APIs, it's a real easy way now to manage your application workload. So eventually OpenStack will have that capability. Is that open source? It is not. It is not. But we package it with our own OpenStack offering today. So your customers can use the scheduler to kind of connect into other resources that you have. So, in a sense, it's plugging into OpenStack. Right. So we look at opportunities such as that, how to enhance the core open source technologies by looking, you know, as you said, start with the business outcomes. What do you want to do? Well, I want to run applications more quickly. I want to be able to have high efficient utilization of my resources and marry those two. And we look at where the gaps fill those in. So what do you think is the big billion dollar moment for OpenStack? What you guys did for Linux? Is I being good at pony up a billion dollars? You already announced, Steve Mills already announced a billion dollar initiative for the cloud, right? So you already got a couple billion going for that. Exactly. Can IBM shake a billion for OpenStack? And will you guys announce OpenStack Summit? Another billion dollars? I mean, but OpenStack Summit's coming up. We'll be there with theCUBE. But I'd love to get your perspective. What do you think that's going to be like this year at Atlanta? I mean, will there be a billion dollar moment from IBM? Will there be other catalysts? What's your opinion on that? Well, when Steve talked about the billion dollar moment for cloud, he was actually was referring to the significant investments you are making in the OpenStack area, right? So what's the core technology you need to manage a cloud, right? How do you do that? It really is the investments there. You look at, you know, we have almost 400 developers today on OpenStack, providing OpenStack technology. That's a significant investment, but it's just the start, right? I think back, you know, 15 years ago when Linux, when we started, you know, there was a core group of 10 people that were working on Linux and soon it became over a thousand. Okay, so what's your key message for the folks out there? I want you to get the word out on the 10-year thing and have a comment on the record. What is the big message around your 10-year involvement? Just give your quick two cents for IBM and then where's it going next? Well, we can't be more pleased on the level of collaboration and cooperation we've had with Red Hat over the years. We've seen Linux grow and we've gone hand-in-hand as Linux has developed and moved from just a project, an engineering project to now being at the core of mission-critical applications and at the core of real business. So we're very pleased and, you know, frankly, I don't know what we'll see in the next 10 years, but I see the relationship with Red Hat being even more enhanced and growing over the next few years. We're crystallizing, and as I said, the three things that we're focused on, you know, focusing on the data on the cloud and systems of engagement. Open source technology is core to all three of those and it really helps IBM help meet our customers' needs by working with the community as opposed to not working with the community, right? So you'll see more and more cooperation over the years. So to wrap up this segment, I want to get your take on the software to find data center. What's, as director of software-defined environments, explain to the folks out there, the CIOs, the IT workers, the folks that are in the business that might not be in the trenches, what is the software-defined data center? What is this mega trend? How would you describe that to someone who is not in the know, so to speak, but in the business? Well, I'll put my marketing hat on if I'm dealing with the audience that really wants to know how they can use it as opposed to how it's built, right? A software-defined, whatever, everything, data center, a software-defined environment, there's two components. And we say, you need an application infrastructure or an IT infrastructure that is application-aware. The infrastructure has to know what's going to run. You can't build an infrastructure and say it'll run everything, right? You have to be very clear, starting from the business requirements, what you're going to run. So we call that being application-aware. The other thing we talk about is the high efficiency. There's pressures on budgets from a business perspective and an IT perspective. We talk about making the infrastructure resource-smart, smart utilization of the resources. So a software-defined environment marries those two components, being application-aware and being resource-smart. So that's, when I explain it with two boxes, when I talk to businesses, they go, I get it, I understand. We don't talk about virtualization and open stack. The techie guys love that. I love it, but they just want to know, will it run my applications and will I get full utilization out of my capital investment? Scott, thanks for coming on theCUBE. Really appreciate it. Congratulations on 10 years. Working with the Red Hat team, IBM, certainly Props, IBM. Really significant moment. Years ago with the billion-dollar investment, kind of really setting up the stage for the Linux movement, enabled all this success. Congratulations, and look forward to talking to you further about that. Going forward, we're on cloud and the continuum of IT data centers into the cloud as we talk more about this revolution and the inflection point of innovation around open source. This is theCUBE, we'll be right back after the short break.