So, good morning everyone, my name is Thomas Blasopoulos, I'm one of the two deputy directors general in our market operations area, and it's a pleasure to also welcome you from my side here at the ECB, it's a pleasure to have this conference again in person. So this morning's session focuses, first session focuses on collateral, and obviously this is an issue that we cannot overstate in terms of its importance for financial markets in the current juncture. We already heard during the Q&A session with Mr. Panetta that there is interest in the question of collateral scarcity and central bank policies that might help to alleviate that. And the first paper in our session looks exactly at this question, it looks at central bank facilities to lend securities back to the market to alleviate scarcity and assesses quantitatively the effectiveness of these policies. So, Stefan Grepmeier and together with his co-author, Stefan Yang from the Bundesbank, have prepared this paper that Stefan Grepmeier will present here today. And the second paper on our session on collateral looks at the role of collateral in another setting still within the context of central bank policies, namely the role of collateral in banking, in backing central bank lending operations, a more traditional role, if you like, for collateral in central banking. And on this topic, Pia Hütl and her co-author, Matthias Kaldorf examined the impact that an important change in collateral eligibility rules, which in fact harmonized the collateral eligibility across euro system national central banks, the impact that this changed had on bank lending behavior. And importantly, this paper traces out also the real effects of this policy change all the way through to the investment and employment decisions of the ultimate borrowers. So, these are the two papers for this morning sessions. We start, as I said, with the paper on securities lending. And Stefan, the floor is yours. The way we will structure the discussions in this session is we will have around 25 minutes for the presentation of the paper. Then Jean David has kindly agreed to discuss the paper for around 10 minutes. And then we'll have 10 to 15 minutes. And then we'll have around 10 minutes left for Q&A from the floor and from the remote participants. So, Stefan, the floor is yours. Thank you. Just a pointer. Yes. Okay. So, yeah, thank you for the kind introduction. And the need summary of the paper. I hope I can add some more on this. Thanks to the organizers for including our paper on the program. That doesn't work. It seems like the battery is empty. All right. At least. Okay. No. Okay. Let's hope that it survives until the end of the presentation. All right. So, this is a paper called Securities Lender of Last Resort on the causal effect of central banks securities lending facilities. It's a joint work with Stefan Janck and Colin from the Deutsche Bundesbank. And since we're both from the Bundesbank, the usual disclaimer applies. These are our views and not necessarily the ones from the Bundesbank or the euro system. So, this paper would have probably not been written without quantitative easing. Since quantitative easing was responsible for making central banks one of, if not the largest, single owner of government bonds. And while the large-scale asset purchases that we've seen surely help to compress yields on long-term bonds. The fact that all those assets then sit on the central bank's balance sheet means that they're missing in other places. For example, they're missing in the repo market where those high-quality assets are often used as collateral. So, quantitative easing in becoming one of the main drivers of collateral scarcity had negative side effects on the functioning of repo markets and also second-order effects on the functioning of secondary bond markets because market makers in those secondary bond markets rely on well-functioning repo markets in order to source collateral or funding when they want to intermediate in the secondary bond market. So, in response to this and in order to alleviate those negative side effects, major central banks in the developed economies, so the Fed, the Bank of England, the Bank of Japan Euro system, all established securities lending facilities as kind of a backstop. So, it's mainly primary dealers that can access those facilities when they're looking for a scarce bond or a scarce asset. They cannot locate in the private market and then they can borrow the bond from the central bank and use it in order to support market functioning. So, in a nutshell what happened is major central banks in establishing those facilities became something like the securities lender of last resort and what we're going to do in our papers we're going to look at the Euro system as one of those securities lenders of last resort and we're going to look at a policy change in the securities lending program in our case that's going to be a pricing change, a change in the pricing conditions of the facilities and we're going to use this change in order to understand how the change is transmitted to repo and secondary bond markets and whether the program works in line with the stated goal and the stated goal of those programs and this is a quote that's directly coming from the ECB's home page. So, the aim of securities lending is to support bond and repo market liquidity without unduly curtailing normal repo market activity and this quote already gives us kind of like a nice neat guideline which dimensions we need to consider in order to answer whether the programs work effectively, whether the transmission works or whether not. So, what we're going to look at are three dimensions, we're going to look at whether the policy change had any effect on the utilization of the securities lending facilities themselves, then we're going to move one step further and we're going to see whether the change in the securities lending facilities utilizations also had an effect on market participants normal repo market activity and here we're going to focus on like negative consequences so did it hurt normal repo market activity or not and then in the last step we're going to examine whether the securities lending facility helps to support bond and repo market liquidity. Now there are already some studies out there on securities lending facilities, there are not too many because those securities lending facilities are a rather novel policy tool and what these studies usually find is that that higher usage of those facilities is associated with lower scarcity in the repo market so there's one study by Fleming and co-authors for the US case some time already ago and there are two more recent studies, one is from colleagues from the Bundesbank the other one is from colleagues from the Dutch national bank who look at the securities lending facilities in the euro area. Apart from that there's another study by Pellitzoning co-authors that showed that due to the lower scarcity that we have thanks to the securities lending facilities that also helps to improve treasury market quality by lowering limits to arbitrage and by allowing arbitrage shares to have better funding conditions or collateral conditions. Now what's the challenge that's common to all studies that look at securities lending facilities is that the use of those facilities is usually endogenous so while the scarcity of an asset can determine whether I use the facilitator or not and to what degree I use it the use of the facility itself can then also affect the scarcity of the asset so there's kind of this reverse causality problem we have here and we need to solve that and our approach in this paper of how to circumvent this problem is that we're going to exploit a pricing change to those securities lending facilities of the euro system we're going to use it as a national experiment to really get to the causal effects of how those facilities affect repo and cash markets and the second thing that's distinguishing our paper from the literatures that we're going to use detailed transaction level data from the repo market activity of major banks so we can directly see how much a bank borrows securities from the euro system and then we can also observe what happens in terms of securities borrowing and securities lending behavior of those banks thereafter so we're really trying to to track the whole process we're you know trying to track the transmission of the policy chain policy change throughout the repo throughout the repo market and the cash market so before I go into details here let me give you some some quick institution institutional background on the securities lending facilities of the euro system so those are implemented in a decentralized fashion which means that each national central bank sets its own rules related to counterparty eligibility collateral eligibility haircut schedule this is mainly done to reflect differences in domestic market practices since repo markets are are to a large part over the counter what's common to all operations is that securities lending from the euro system of the euro system can either take place against securities collateral so one security is exchanged for another or it can take place against cash collateral these are the two options and what's also common to all the activities that they're subject to individual counterparty and the global limit in order to to contain the risks um the most important point here is however um although the securities lending facilities are organized in a decentralized fashion um there's an overarching pricing framework that should ensure the backstop character of those facilities and the pricing framework um is is exactly the one policy element that we're going to look at um because that one changed um in november on november 2nd 2020 um so so we highlighted the change in red here these are again the two options that we have so borrowing against securities collateral prior to november uh second meant that um you can you can do that against the fixed minimum fee of 10 basis points after or at on november 2nd this was reduced to five basis points so 50 reduction um the cash collateral option was also affected so prior to november 2nd um you could borrow from the euro system at a rate of the deposit facility minus 30 basis points and the spread of 30 basis points was then reduced to 20 basis points after november 2nd it's also a sizable reduction so in a in a nutshell the the pricing the change in the pricing uh schedule we see here made the use of the securities lending facilities of the euro system cheaper uh it moved it moved it closer to market conditions so what we're kind of expecting is that after the pricing change there should be there should be more utilization of those facilities and we can immediately or we can directly check that with with data that's available um publicly on the website um so what you can see here is the the daily amount of securities that are lent from or borrowed from the euro system um in the years around the pricing change so the red line don't know if uh in the middle of the graph that's the pricing change um the black line is the aggregate amount of securities that are on loan um the blue and the green line are securities collateral and cash collateral respectively and you can see that prior to november 2020 um the the daily balance um hoovered around uh 30 to 35 billion after the pricing change volumes immediately went up they sharply increased um and one year after the pricing change um securities borrowing amounted to um an amount of roughly 75 to 80 billion and this amount keeps on increasing so the the use of those facilities is is still a very common tool nowadays now in order to to tease out the causal effects of the pricing change um what we're going to do is we're going to have a difference in difference approach um using the pricing change as a as a shock as a supply shock a positive one and then we're going to um have a treatment variable and here the idea is that um we're going to argue that securities that are borrowed um are heterogeneously affected by the central bank induced collateral supply shock so what we're going to do is we're so what we're going to do is we're going to um split the universe of government bonds into bonds with elastic repo market supply and inelastic repo market supply and the way we're going to do is is we're going to look at the investor base of each bond and we're going to um argue that some investors are more likely to lend their bonds whereas other investors are less likely to make their bonds available for lending in particular they're less likely to condition their lending decision on on prevailing market conditions and the investors that are that are less likely to do that are for example households non-financial corporations um governments uh or insurance companies and pension funds so if there's if there's a lot of um holdings of the bond going if if a lot of uh one bond is held by those investors then this bond is likely going to have a low supply and private repo market which means that market participants in need of those scarce securities are more likely to borrow them from the euro system per se and even more likely to borrow them after the pricing change when when the use of the facility has become cheaper so we're going to construct a continuous treatment variable which is the share of inelastic investor in each bond and we're going to do that based on on detailed ownership data and we can also we can also back this claim um in the data um if we plot securities lending volume by different counter parties then we see that the the the investors we term as inelastic are are indeed the ones that have very low securities lending volumes in the repo market all right um in terms of hypotheses that we're going to test um as I said um our starting point is the policy change so um what we have are cheaper borrowing conditions at the euro system securities lending facility then in the first step we're going to um examine how the use of those um facilities change around the pricing change and the expectation is that um when conditions become cheaper then there's a higher use um or a higher securities borrowing in particular for securities that have that have an otherwise inelastic supply to the repo market we then move on to overall repo market activity and here we have two competing views um the first one is the substitution hypothesis which means that um if if banks borrow more from the euro system then they might borrow less from from private market participants so there's some kind of crowding out taking place which means that if those two effects cancel out then then we should see no effect on overall collateral availability unless borrowing from the market um under the second hypothesis which is the collateral multiply hypothesis um things look a bit different here the higher use of the securities lending facility translates into a higher overall collateral availability because market participants are going to use the collateral they borrow from the central bank in further repo transaction they're going to reuse the collateral which means that overall collateral supply should go up in the last step then we're going to look at effects on the repo and the bond market and here the two hypotheses um are again at play so under the first one that's related to the substitution hypothesis if there's no effect on overall collateral availability then we should not see an effect on overall repo market scarcity and bond market liquidity um if um the collateral multiplier hypothesis is at work so an increase in overall collateral availability then we should see less repo market scarcity and and a higher bond market liquidity so improve conditions in both markets um the data we use um the main two data sets are uh two data sets from the euro system so the first one is the the money market statistical reporting data set which contains uh transactional level data of uh secured money market transactions of the 47 largest euro area banks um we observe both the amount of securities those banks borrow and the amount of securities those banks lend from the euro system from other market participants so from other banks that report to the data set but but also from from further counter parties that uh that don't need to report to the data set and the second um data we're using is the securities holding statistics um and we're going to use it to construct our main treatment variable um this data gives us um a sectoral decomposition of of the investor base of each bonds so on a sectoral level um at the at the quarterly basis we observe how much of the bond is held by banks how much is held by insurance companies and so on and so forth and as I uh argued before we're gonna split the investor universe into into two types of investors elastic investors that are likely to supply uh bonds to the repo market those are monetary financial institutions and investment funds and inelastic investors that are less likely to supply their holdings to the repo market households insurance companies pension funds governments and non-financial corporations and we kind of borrow this definition from the literature now if you if we then start very simple and uh we simply look at how the how the um amount of securities borrowed from the euro system changes according to whether the bond is held by a lot of inelastic investors or uh a lot of elastic investors so we're splitting the sample in in two parts um we again look at the time around the pricing change the black line is the securities borrowing volume of bonds that have an inelastic investor base the blue line has an elastic investor base and we can see that the increase we observe in the public figures is entirely driven um by securities borrowing of bonds with an inelastic investor base so those bonds where private repo market supplies low those bonds after the pricing change are borrowed to a much higher extent from the euro system we then do a formal test um of the graph so we we set up a difference a difference model um with the dependent variable being the amount of securities borrowed from the euro system scaled by the amount outstanding of each bond to make things comparable um we first look at one year prior and one year after the change and we can see that um if we focus on the first column here um in general that's the post coefficient um the securities borrowing from the euro system increased after the pricing change and in particular it did so for bonds with an inelastic supply so that's the that's the interaction coefficient post times inelastic supply and where we have a highly significant positive coefficient we then saturate the model with time and bond fixed effects um the coefficient decreases a little bit but but stays highly significant and then we also we also shorten our event window a little bit um to eight weeks around the pricing change in order to have have very few confounding factors that might influence our results and here we also have a highly significant positive effect so there's more borrowing from the euro system um in terms of economic significance what do the coefficients mean for a one standard deviation increase in inelastic supply um we're going to have a 68 percent higher SLF utilization relative to the period prior to the pricing change um if we then go into the details of the um of the securities lending facility and look at the two different options of how to borrow securities against cash and securities collateral we see that the effect is roughly equally strong across those two options if we um split up borrowing in terms of the repo tenor market participants use we can see that borrowing mainly takes place at at term repos of one week or longer which is um something that we don't observe that frequently in the market itself um all right how much time we have left five minutes all right um if we then go to the to the overall repo market activity so here we have the same model um we just replace the amount borrowed from the euro system with the amount borrowed from the market um if we look at the overall amount borrowed from the market the first column we don't have a significant coefficient but it's it's it's positive um and if we dig a bit deeper um we can see some nice effects um the total amount borrowed increases which means that here this is evidence that is rather consistent with the collateral multiplier hypothesis market participants seem to use the collateral they borrow from the euro system in further repo market transaction such a total amount borrowed increases and we can even um quantify the collateral multiplier here since we since we scale all our uh variables by the amount outstanding of each bond and we can directly compare um the coefficient of what was borrowed from the euro system with the coefficient that's related to the total amount borrowed and the ratio kind of gives us the implied collateral multiplier um so for one additional unit of collateral that's borrowed from the euro system after the pricing change there are three additional units of collateral overall so the collateral multiplier here amounts to three if we then again split up repo market activity a bit more um into the tenors um we can see that in contrast to the borrowing from the euro system which mainly took place at at term repos of one week or longer in the market um borrowing mainly increases overnight so there seems to be some kind of maturity transformation along the repo chain market participants borrow term but then in subsequent transaction we see an increase in overnight borrowing um if we further then then check some more facts on the collateral multiplier hypothesis we can see that um that's the that's the first um three columns that uh banks do not only borrow more securities they also lend more securities which is kind of like a condition that needs to be met in order for the collateral multiplier to make sense and we can see if we consider both the reuse amount so that's collateral reuse divided by amount outstanding and the reuse intensity that's collateral reuse divided by the amount of securities borrowed um those two um variables also increase um in particular for for transactions that are centrally clear so what we have so far is that um central market participants borrow more from the central bank after the pricing change this translates into more collateral availability overall thanks to the collateral multiplier effect if we then look at effects on repo market scarcity which we measure by the by the specialist premium which is the repo rate minus the gc pooling rate um we expect to scar scarcity to decrease so specialist to decrease since we have more collateral in the system after the pricing change so here we have the same model different dependent variables that's the specialist spread um we look at it for different tenures overnight tomnext and spotnext for different data sets in order to check robustness and again we find effects that are consistent with our expectation we find a decrease in the specialness of bonds in particular bonds that have an inelastic investor base in terms of economic significance we find that after the pricing changes the one basis point reduction in the overnight specialist premium that's where most of the market borrowing takes place so that's where most of the effect on rates takes place and this one basis point decreases equivalent to a 13 decline relative to the period prior to the pricing change and last but not least we look at a bond market liquidity so given that market makers can can borrow more bonds and they can borrow the bonds more cheaply in the repo market to the extent that they pass on those lower costs to their customers we should observe a decrease in the bid-ask spread following the pricing change so we regressed the bid-ask spread on again the post dummy and the inelastic supply variable and we can find that there's a reduction in the bid-ask spread following the pricing change the reduction amounts to a point six basis points which is a five percent relative decline relative to the period prior to the pricing change so also kind of sizable all right so let me conclude with again looking at the quote that gave us the guideline the aim of securities lending is to support bond and repo market liquidity without curtailing normal repo market activity what are our insights from the pricing change and how the how the tool works or and whether it works effectively we can see that utilization of securities lending facilities sharply increased after the pricing change in particular for bonds that are otherwise hard to locate in the private repo market we do not find strong evidence or no evidence for substitution effect rather total securities borrowing and lending increases via the collateral multiplier effect which then leads to improved price improved conditions in the repo market lower scarcity and improved conditions in the treasury market through higher bond market liquidity thank you very much thank you very much all right i would like to thank the organizers for letting me discuss this very nice paper so i'm going to start with a very short summary of the paper and i'll talk about the big picture question yeah so what's the research question of this paper what is the impact of central banks programs of securities lending and what is the empirical strategy it's very nice they exploit heterogeneous exposures to an increase in central banks securities lending what do we find first they find that there is a positive supply shock meaning that we have a lower price lower spaciousness and higher volume of securities lending second main finding of the paper is that the change in policy decrease bid aspirates that is it increase liquidity in the underlying markets they find a lower bid aspirate and i'm going to focus the discussion on this second finding because i think this is the the future for this this paper what is the big picture question here and in the next slide i'll motivate why it's important to me is the following does securities lending have an impact or not on market liquidity and there are two ways to answer this one way is to think about a direct impact and the direct impact goes as follows market makers decrease bid aspirate when they can borrow easily the securities that's straightforward to test this is nice and second it's not trivial and i'm going to give you examples where you can even go the other way the fact that it's straightforward to test and not trivial is a promising avenue for the paper to me the second way to to think about this question is an indirect impact as follows market makers decrease bid aspirate when short sellers are able to incorporate negative information by borrowing easily the security it's a bit complicated to test and i think it's clearly true based on the literature so i would not focus on this okay so why should the paper address this question well it's clearly a key question monetary policy has large impacts on money markets in turn money markets impact securities lending if securities lending impact securities this is yet another mechanism where monetary policy can impact market liquidity so it's clearly an a key question second the authors have a better technology to answer this question than the literature so what the literature has used is quantitative easing as an impact to specialness so basically the central bank buys a lot of securities it makes it harder to to borrow those securities and specialness increase the problem is that quantitative easing also has as a direct impact on the outstanding amount of tradable bonds so it has an impact on how many bonds are available to trade in the market so quantitative easing has two impacts on specialness and on the outstanding volumes so with quantitative easing one cannot attribute the change in liquidity to specialness maybe the change in liquidity comes from the lower a tradable volume but the authors here have an exogenous shock or seemingly exogenous shock on securities lending only not on tradable volumes and that's a much better identification than the literature and finally this paper is encouraging first results of bid aspirate so why not go go for it further so i probably see you that show you that it's not trivial that specialness impacts liquidity and that makes it an interesting question imagine the following situation at t0 you have a mid price of 100 euros the bid price is 25 cents less and the ask price is 25 cents more and to facilitate the interpretation suppose the dealer's inventory at t0 is new so basically when a dealer has to sell a security what it's what she's going to do is to borrow the securities on the market and to pay the specialness so specialness is a cost on the ask side when the dealers buy the securities she puts it available for lending and earn the specialness so specialness is a revenue on the bid side suppose that at t is equal to one the specialness decreases by 10 cents what happens this is what is going to happen the bid price is going to decrease by 10 cents because the dealers charges the full decrease in revenue fine but the ask price is also going to decrease by 10 cents because the dealers is going to pass on the full decreasing cost in the end there will be no change in bid as spread only the mid price is going to change and that reflects something that Darrell Duffy in the in the 90s found is that specialness represent a stream of income to the holder of the bond and when this stream of income decreases the mid price the fundamental price of the security decreases so in principle securities lending should not it's not trivial that it impacts liquidity and so you need an asymmetry and sometimes you have the wrong asymmetry and it goes in the opposite direction imagine dealers have market power and one can find that securities lending an increase in securities lending will decrease liquidity with market power what happens on the side the same the dealers is going to charge the full decrease in revenue but on the ask price what's what happens is that the dealers would be the dealer would be reluctant in passing on the full decreasing cost she's going to pass only part of the decrease so the bid price will decrease by 10 cents but the ask price only saved by 5 cents and the bid ask price increases from 50 to 55 cents liquidity decreased so for that you need the right kind of asymmetry I don't recommend this kind of model but for example if you support short sellers instead of market power then you will find this because for short sellers short sellers are going to borrow and pay borrow the security on the on the market and pay the specialness and then sell it to the dealer on the bid side and if short sellers have market power they're going to pass on only the decreasing cost the decreasing specialness to the dealer and then you're going to find a decrease in in in the bid ask spread an increase in liquidity okay so basically I don't recommend the the authors to go for this kind of models they're too simplistic but I would recommend the authors to think about more more about the conceptual frameworks that link that would link specialness okay securities landing to market liquidity I'm going to be short and just talk about one other remark the author should spell out the shock a bit better here's the policy change um here I give an example for securities lending against collateral so before the policy change the lending thing was the maximum between 10 basis points and the market fee okay after the policy change it was the maximum between five basis points and the market fee but it's unclear that the policy change decreased the cost of borrowing imagine the market fee is 15 basis points then it's 15 basis point before the policy change and 15 basis point after the policy change and that leads to a conundrum for the policy to result in a price shock the market fee should be sometimes less than five or 10 basis points but if the market fee is less than five basis points why not borrowing from the market in state a potential solution to this conundrum is market breakdown so these people borrow from the central bank only when the market breaks down okay but is that the case during the policy change or adverse selection the the entities that borrow from the central banks are the entities that that can only borrow at a very high market fee and this should be better explained and exploited if there is adverse selection this is very interesting and you could use it the other remark is more a wish list so what would be nice to have is to test the policy against security for the security against security transactions because you use the mmsr and that would be security against cash transaction and what you could use is data from market is a bit expensive so let's see if you have budget but that would be a nice to have okay so let me conclude it's a nice paper with this identification I would suggest the paper to refocus or to devote a large part of the paper to answer a key question does visionless have an impact a direct impact on liquidity the authors have an advantage to answer it compared to the literature so we should go for it there are some efforts needed to develop the conceptual framework that links spatialness to market liquidity and to explain and exploit better the the conditions that lead an entity to borrow securities from the central bank instead of the market and I look forward to the next version thank you very much Jean David so we're basically right on time which means that we we can also take some some questions from the audience and then perhaps Stefan you can answer also including any reactions you may have to the Jean David's comments so the floor is open also for questions from the audience also from remote participants yes please the the microphone will be brought to you yes thank you very interesting paper I understand you use the mssr the mmsr database can you see there a difference also in the database itself is it all specials and single names or is there also data on on GC trades in there and also in the in the usage of the lending facility can you see the difference between whether or not it's being used only particularly for bonds that were special and had a pricing interest to be used in the lending facility or was there also usage of GC for providing liquidity to the markets in terms of collateral scarcity yeah so so there is no like indicator in the MMSR that tells us what is a special trade and what is a GC trade however given that you know there's this we're working in an environment of huge excess liquidity there are estimates out that that say that around 90% of all MMSR transaction are related to special repos which means that we're kind of leaving the GC side apart and assume that the main motive for an foreign market participants also to to get in touch with the euro system is is related to collateral motives and not funding motives so we cannot directly distinguish it however I think it's a reasonable assumption to say that that the overwhelming majority of the trades we we see in either cases related to special repos Andrew please thanks um if I understand your paper correctly it's sort of framed in terms of deltas you know what happens if a change here affects exchange there but um many of our markets at the moment have really high levels of gap between I don't know whether you want to do sort of bond swap spreads or whatever mantra you want to use so how can we use your paper of a tool to understand how to get closer to the optimal level as opposed to the delta which of course is the big policy question we're all facing or does the paper not really help with that thanks so I'm not sure if I if I fully understood the questions but the the so at least the results we're showing um in terms of specialness and so on it's on levels so we see that it's indeed the level that decreases for specialness um going closer to the optimal level would mean that we need a guess on what the optimal level is um we certainly don't don't provide that guess um I think what's what's what was our at the heart of our paper is really to to understand how you know twisting one of the policy parameters of such a novel policy tool um how that transmission then uh works throughout the reap when bond market um whether it helps us to get closer to an optimal level or not um it's not the main part of the of the research question I think it's more about the mechanics of how such facilities work thank you let's take one more question over here please thanks for the interesting presentation and the paper as you distinguish between elastic and inelastic investors I was wondering how you deal with uh foreign investors so outside the euro area given that for boons we know that quite a big share is held by uh foreign official institutions I think and they are quite inflexible as well but those are not included in shs to the extent that I know so yeah that's right so the foreign investors are not included although there are major investor group um in the in the government bond space um so um what what we do is um we kind of first of all follow follow prior literature um which puts foreign investors into the the group of elastic investors um um yeah so we treat foreign investors so in the shs we treat it as the residual between you know the amount we can attribute to each sector and the amount we cannot attribute this is the foreign sector for our definition of the variable the foreign sector goes into the elastic investor part um probably we basically also assuming then a large part of those foreign investors might be again monetary financial institution active in the repo market which would then be the elastic investors yeah so those are elastic elastic yeah there's a pertinent question also knowing that uh some sovereign wealth funds outside the euro area are big holders of of these securities and indeed also active in securities lending albeit episodically I believe there was also another question here more to the front yeah thank you I think it was um very much along the lines of the question that we were just discussing so maybe it fits well so I was wondering who are which bonds do those inelastic bond holders hold and do they have a preference and does that have a role for your result uh we would need to check that whether there's there's cross-sectional differences in which kind of bonds elastic and inelastic investors hold so ex-ante I cannot think of of one um but yeah that yeah might be something we need to check whether there's there's some systematic difference in in the bonds they hold um which might explain our results well taken so I I'm not sure we have any further questions but I'd like to give you also some time uh Stefan to get back to if you like if any reactions you you may have to Jean-David's comments sure um yeah so thanks for the thanks for the discussion uh very insightful I think that's uh the the um the part about the liquidity so we're still thinking about the the really big picture question that we want to address because you know leaving it like this might be a very specific topic um so that might be a good way to to to go for the future um we're still at the moment working on on more dimensions of dimensions of market quality to kind of leave up that part of the paper um we haven't really thought about the the micro linkages the direct and indirect impact of of liquidity so that kind of is a bit it needs it needs more work um so we we will surely think about the the your ideas um yeah apart from that um so I mean we do have a model in mind if when we talk about what links liquidity and specialness um that's uh one by uh in front and who um so that it's related to your thoughts but I think yours go a bit bit further in in bringing in this asymmetric impact so that's that's a really interesting thought um yeah so I think I'm I'm gonna leave it with that uh I definitely need to think much more about about the discussion before giving giving quick answers but yeah very much appreciated welcome okay and with that we're right on time so many thanks to both for being disciplined and for very interesting presentations and many thanks for for the questions and um yeah uh let me invite you all to to thank Stefan and Jean David thank you very much


Good morning. Good afternoon. Good evening and welcome to another edition of in the clouds I am Chris short executor producer of this thing called OpenShift TV. I'm joined by two wonderful Red Hatters today We're gonna be talking about the Red Hat marketplace Katie Gillio is here and Lars Herman is here Katie. Would you like to introduce yourself? Tell us what you do here at Red Hat Sure, thank you Chris and happy to be here. Hello to everybody. So I'm Katie Gillio I am the product marketing lead for our Red Hat partner ecosystem Which means I work on the positioning of our certification offerings with our ISV and SI partners and then I also lead the positioning for Red Hat marketplace and I get the chance to work with a lot of our IBM and Red Hat sellers and ways that we can better ensure that our OpenShift users unlock that value of OpenShift So I'm really excited to be here and thanks for having me. Well, thank you for coming I would like to note that Katie is even doing this while she's on PTO. So, thank you very much Katie for coming on there You're welcome. Lars, how are you doing sir? I'm doing well. Thanks Chris and Thanks everybody for tuning in here. I'm glad to be here. My name is Lars Herman I'm responsible for the partner ecosystem at Red Hat out of our products and technology organization It's all about creating customer choice of lots and lots of solutions and technologies to use and driving success Not just for Red Hat, but for all our partners in driving value for our customers and hopefully grow the business on the way Awesome so we have a kind of icebreaker question we asked on the show here and We were discussing it before we went live and Lars is gonna be difficult for you, but it's more easier for Katie and I Is cheesecake a cake or a pie? And we asked that because it's not a clear like definition there Although maybe there is So if you're asking me that question Chris, I don't have a horse in this race Because very simply put you might see the little flag in the background I'm from Germany and and I don't I don't think that the word pie in the English language is well enough Define to really be able to answer that question. It goes against the German desire for precision in the language So I don't really know the answer to that Fair enough Katie you have a dog in this fight. I feel like right like I do and I Did have an opinion when when I first thought about it So I do think with a with a cheesecake when you have a cheesecake It's at the end of it You really feel like you had a slice of a meal and I Differentiate that between a cake a cake has that that delicious end of meal closing out the meal field But a cheesecake you could almost just use that for your dinner and then you can substitute it with some You know a pie can be a meat pie. It can be a variety of different styles of pie So I'm gonna classify this as a pie versus a cake Very well cheesecake is my favorite dessert. So I don't care what you call it. I just eat it Unfortunately, I have the the lactose intolerance so I had to give up cheesecake a long time ago I know I I did have it when I was younger. It was delicious, but yeah, I just looked at it from afar now Yeah, like I'm not big on sweets for some reason and yeah, maybe that's why I don't know So thank you for entertaining me for a second. I appreciate that so What is redhead marketplace What is it designed to do? How does it help people? Sure, sure great question. I'm and really thrilled to talk to everyone about it today so really simply put redhead marketplace offers open shift users that ability to discover To trial to purchase many been managed a certified Container-based solutions from our our ISVs and also from redheaded and from IBM We have about 75 and Gaining by the day commercial offerings in marketplace that are across 12 different categories. So for AI and now data databases DevOps security Developer tools big data storage. I mean anything you you really need in order to move workloads on to open shift And and that's and that's the purpose that the products within marketplace serve We work with such ISVs as anchor cockroach labs couch base Dynatrace Let's see a MongoDB. So there's quite a variety That we offer and and these are commercial, right? So they're not community. These are these are commercial offerings But the thing to think about when you when you look at marketplace is yes, it's it's an e-commerce Offering but within it is the most important part, right? so that takes us a step back into talking about operators and so when we had You know the the the coming with a launching of open shift for what that brought us was Kubernetes operators and While many of those in your audience might be well-versed I have learned that not all open shift buyers are as well-versed in operators and So even our team had a take a step back just to think about okay, so we start to engage with these open shift users Let's really talk to them about why they want to use operators and so What we you know what we want to ensure is that they understand especially for develops and IT admins That operators provide that ability to rapidly and more secure and more securely automate lifecycle management Of applications and supporting infrastructure. So that means that that burden of managing manual tasks Such as deployment and upgrades and backups is alleviated And that's really important and I know Chris prior to this you said you've had lots of experience and that Because what we want to you know and operate what we want is that automation, right? And you want to be able to provide those that aren't his experience but can be experienced And still be able to have agility Reliability and then it's just the simplicity of operating the day one and day two Operations across hybrid cloud without being an expert and and Chris I don't know if you found that to be true, but that truly is that that benefit of using operators I mean the the operator pattern itself is incredibly powerful because it it sits there and it It's the reconciliation loop is what makes it Joyful for for me an old operator person to say right like hey, here's a mundane task Let me just put this little bit of code be it, you know go helm Ansible and bake it into an operator using the operator framework, which is a upstream see or incubating CNCF project And and just have that mundane task taken care of me from that point forward once I've applied the cr and and and not having to Worry about it literally ever again, right? Unless unless I upgrade, you know a version of something and you know, then I need to you know, bump some updates into the the operator itself, but Absolutely It is incredibly powerful pattern and folks. There's a wonderful book about it. I dropped the link in chat earlier But if you didn't please download it check it out. You can get yourself started with the operator framework and you'll be off and running Yeah, so the So to add to that value, right? That's where we have marketplace right so because within then marketplace correct You have the the offerings that are there are certified operators from our partners that Really help with the majority of workloads you're going to see moved on top open shift right the But it gives people like There's a trial for everything in the marketplace. Is there not? Right, so yeah It's an excellent customer experience When you go on to marketplace and Lars and I are going to show you a demo later easy to navigate And an easy to discover Whether you know the vendor you want to work with or you need a solution within a specific area And when you start to take a look at all the documentation that's provided from each of the partners you become very well versed And then every Partner product has a 30 day trial And so you can spin it up on one of your open shift clusters, which I believe Lars We're we're going to do a little demo to show you how easy that is And then after the 30 days, I mean it is the function of Using a credit card to make a purchase There, you know, also there are some private offers. You can work with the partner directly as well But the accessibility of a variety of these products in one location is what makes the difference now In a in a very simple comparison to aws and to asher and in google cloud with marketplaces What you have though is the ability to use these products across any cloud In any environment that openshift runs. So now you've got your portability, right? And you have your choice. You're not locked in specifically to one cloud with one application You can now use any of these applications on openshift and across multiple clouds So that's the true differentiating offer that we give to to users It's really nice too because you get the same experience On premises as you do in your cloud provider and that That ability to say, okay I need to try this out in both environments at the same time and give giving folks that capability to try before they buy is always always always helpful, right so We have to develop an ecosystem of partners and tooling and everything else that matters And we've got great stuff in there right now, right? Like everything if you need postgres Do you need identity management? We got you but Why does the ecosystem matter large? Why is that so important? Yeah, it's a it's a great question chris and before we actually go ahead and let me add one more thing to the marketplace experience Because it's timely just two days ago The the IBM team who was building the marketplace with us and for us actually won a design award for the marketplace Or basically how easy it is a simpler way to explore everything And that that's that's really an awesome validation of of our vision for creating like easy access to a whole inventory of things That can be used anywhere now to your question on the ecosystem Redhead's business Fundamentally is a platform business and always have been redhead has always a plot has always been a platform It started out with linux obviously that was a platform that you would run on hardware To then run enterprise applications or develop them Or later we got into the middleware business with jbas, which again is a platform, right? So now the platform is cloud broadly speaking And you can you should absolutely think of aws or azure or google as a platform and And so is redhead open shift So is redhead enterprise linux and a platform really In itself doesn't do much for you A platform's purpose is to light up something that you actually care about right the thing that creates real value And and that's how a platform adds value because from a developer standpoint The platform allows you to leverage technology that you didn't have to write Simply right it gives you it gives you capabilities that you don't have to worry about anymore and same from an operations standpoint We had the discussion about operators A good chunk of the operator value is is the automation right one Basically one click or one command line and suddenly a whole set of magic starts off That otherwise you would have to manually follow in this And that is an example for how a platform adds value because the platform provides these interfaces That that anything that interacts with the platform can use in order to do its job now From a redhead point of view the ecosystem is incredibly important because it defines how useful platform is simply how many people who can be relate to How many people can be helped with getting their job done from a customer perspective? I think it is it is a little different Because there is on one hand, of course that desire of I want access to a very broad range of things Ideally completely unconstrained anything under the sun I can find I want to use in my in my environment And I want that usage to be frictionless. I want that to be secure. I want that to be stable I want that to be somewhat predictable And I think this is this is our model for building an actual ecosystem Well, redhead really participates in two main ecosystems We are on one hand in the open source community, which of course is now the default Innovation model right or creation model for almost anything and and that in itself creates an ecosystem right There are people who are using technologies people are participating in the discussion leading to the decisions and of course the people who write all this stuff And similarly we need a commercial ecosystem that builds on all that community goodness But now adds certain attributes that are just important in a business environment or in an enterprise environment such as Who is making sure that if I if I use technologies from 10 20 30 different vendors, right? These things actually work together like who's on the hook for that, right? Right, you can you can assume that it might work because everybody has that as a shared goal Who's actually on the hook and then and if something goes wrong Who do you ask to fix it? Right? That's that's the other part in it, which is important And and then of course now it has gotten incrementally more and more and more important the more Solutions get connected and now with cloud. It's really at a completely new level, which is security Like how can you trust that the thing you're using? It's actually the thing you want to use and not something malicious that someone injected into your supply chain How do you use how do you know that it's actually maintained and kept up to date? And how can you trust that the vendors So I think that is that is broadly Why why an ecosystem matters it delivers value by what is in the ecosystem? It creates a certain predictable experience and from a vendor perspective It basically allows you to create business opportunity. It chases business opportunity a lot of the partners that katie mentioned earlier They are in the marketplace because they see opportunity to serve their customers better reach new customers Reach into markets that they might not be strong in yet Basically always to grow your business So so the idea in an ecosystem is of course win win win, right? Everybody wins if we connect the dots, right? That's awesome. And sorry about that. My dog decided that she wanted to let the audience know she's feeling much better. Um That's awesome so you mentioned frictionless and right like my background is in dev ops I started working in kubernetes pretty early on and Reducing friction is like always a challenge What have we done to kind of Pop the lid on friction and say no this marketplace solution will give you a A more seamless kind of experience one that you're going to enjoy more Essentially, right like because friction creates Anger anger creates hate and hate leads to like a yoda quote or something. Um, so yeah what is some of that Value add that we've put into the marketplace to give people that friction reduction Yeah, let me let me let me take a shot at this and katie. I'm happy to let you add a perspective I would say In in this is 2021 right and so friction. What is what is actually friction? Let's let's think about this for a second um from a developer point of view If I want to do something I want to do it now I want it to happen pretty much immediately And I wanted to go right the first time right and and I think a lot of this this experience is delivered very well In an as a service type experience right you go to to something which is already basically running for you You click a button and now you can access it with an api with a secret whatever um We have embraced that as the goalpost for what we want a marketplace experience with openchief to be Uh, we want software even complex software such as distributed data stores or machine learning solutions These are things that that are that have an inherent complexity to themselves So they don't necessarily lend themselves out of the box to this sort of instantly available and ready for the job sort of pattern What what we have done? Honestly, we've we've combined the components that we already have we have a platform open shift That can run any containerized workload It used to be any containerized linux workload now we're even breaking beyond the linux boundary Uh, which we don't really need but some people might like it. Um, and I say this as a 20 plus year linux guy We've taken the operator framework where did we talk earlier, which provides an awesome technology approach for turning a piece of software Into an actual service experience because the operator takes care of all the automation that is needed for that from provisioning configuration but also upgrading scaling Managing resilience and most importantly as applications running on a distributed system Continue to run on a distributed system because the operator allows it to respond to any event that happens on the cluster Depending on how it's written, right? But theoretically you could take it to that level. We call this the autopilot level And now the marketplace what the marketplace adds is It's basically an experience That makes the ecosystem accessible through the journey That a human would actually take from and I will we will see this in the demo later Like I need a database show me what you got, right? I want a database with certain attributes. Can I filter that? Yes, you can. Okay. I want this one here But i'm not ready to spend money. Let's go into the trial. We talked about I want to try it. Okay Now this thing works really well. I've written my app. It does what I want No, I want to have the security of support and version updates going forward I basically want the commercial version And this is just one click away and now you're running the commercial version basically, right? And all these are in an integrated experience that we want from a redhead point of view And of course we partnered with IBM on that We want to be as easy as a public cloud experience Without requiring you to run in any given public cloud So if you can do this on a public cloud, you can do this on another public cloud You can't do it on prem. You can do it on the edge. You can do it on your laptop We don't really care what that runs wherever open shift runs. You get that experience That's the simple approach And that I think is the power of open shift to an extent, right? Like you have a consistent unified control plane where your apps perform Or act the same and you have access to the same apis across clouds to you know Interact with kubernetes or interact with your applications or interact with the marketplace itself So, you know, there's a lot You know, i'm scrolling through the marketplace pages. I'm seeing a lot of brands I see, you know normally in the ecosystem of you know cloud native and everything so What are the partners getting out of this katie? That's kind of my my next question is if i'm a partner, what do I get? And I was going to say before I answered I just I did want to add on to what lars had said Which was if you're talking about friction and we touched upon this a bit before we started the show Friction could also mean then working with your procurement teams when it comes to billing, right? So now you have we are looking or we are attempting I think we did a great job of it of eliminating that friction with procurement as well Because our our private offering which is called redhead marketplace select now a lie Allows our the it ops team to curate a selection of applications and provide them into Your your own marketplace, which I believe some companies probably doing on their own Right, but I would bet this would be a better experience And so now you have the ability to provide access to those who are monitoring the spend They need to see utilization Of that application And and why we don't have that complete utilization just that's what we're working towards But you would be able to see How much of each product is being used when your annual contract is is up So it it now gives greater control to cost management or asset management But with that that ability to remove the friction for those who want to just use the tools Right. Yeah, and I think Katie. Thanks for adding this. I think this is a very important point Chris. Let me let me jump in here Because I actually I I think cloud adoption has reached the state where Buying and spend management is part or should be part of a cloud strategy Yeah, so exactly. I think I think we're no longer at the pace. I remember like when cloud was new It was seen from a procurement point of view as basically shadow IT All right, here's someone doing something that we didn't endorse The spending money in ways that we didn't want That's mostly gone. Right. I think now what we're seeing very intentionally Crafted processes and relationships with cloud providers with service providers with vendors That that are trying to really manage the internal enterprise requirements around government Governments around cost around security And combine this into a commercial model But still there is that inherent friction for the team because they can do this in one environment one way And they can do it in another environment, but the more environments you have the more complex it gets of course One of them has their own little way of doing things. So there is the inherent friction of complexity Which is another way to do it. I think we aspire definitely to address that On many enterprises, they are large organizations, right? I mean, they have tens of thousands of individuals That are actually participating in the let's say technology related activities broadly speaking It's not just all development and operations And so just being able to create the agility for all these teams To be able to access the technologies they need to get their job done At the time when they need it without having to Ask for permission fill out a bunch of forms wait for an answer And I mean all these things can basically be automated in the marketplace and we believe this is Is going to be a strategic value to our customers because they can implement a set of internal processes and policies That aim at I want to be intentionally flexible with where I build my applications what i'm using for them So it's that ecosystem of dimension we talked about earlier and at the same time Be able to delegate control within the organization because that delegation creates autonomy Autonomy creates agility and agility creates value, right? That's in the end of the day That's I think how many organizations think about that. So we cater to this. It's still early. I think with containerized software Oh, yeah, necessarily at that stage yet. Well, this is the Major movable leader a needle mover. I think right now it's more about facilitating Adoption facilitating an initial impact, but it will hopefully quickly grow into that into that dimension And we do have one We have multiple customers that are now using select, but we have one that is public So anthem is one of our open shift customers and Purchase select for just that purpose or is planning to do it for for that purpose of having You know a digital centric approach And that they can provide more of a private as they called it provide a A private developer centric location where then the developers are just allowed to innovate products and services. So They they saw evaluate it and in others within various different industries are also going. Yeah, right? I get it. I understand what I can use this for Well, I mean now I remember contracting out like big banks and stuff and they would have like Oh, if you want a mysql database This is the ansible playbook to pull down and use there's a whole role to install it and get it set up how you want it now it's Just go to the marketplace or the select marketplace And pick the default tool that we use that is fully supported And you have the reduction friction between you and your finance team because now you're talking the same language essentially And it's a single bill, right? Like it's not like we try to do like if you have 14 partners in the marketplace There's 14 different bills. We try to consolidate all that don't wait Correct. Yep. Now that is the additional benefit of having that absolutely I mean when you tell your finance teams that hey, I'm gonna have one place to get all my software from They really really like that And it's and it is and I think it's important. It is inclusive of Different models of how commercial things are offered, right? You can do proprietary licenses Check you can be like metered offerings like on demand services typically but also software increasingly can be offered now this way because we're using The built-in metering capabilities of open shift So software vendors can offer their own products in a as pay as you go motion Well in any environment, which is a little scary from a vendor perspective because the predictability of revenue Gets a little lost in that system, but it's super convenient to customers, right? That's right. We're looking for this to become very important and also basically offering now Basically the ability to buy certain software as a service offerings from vendors that are popular with developer teams So they get to this Everything you need or everything you might need you can pursue and purchase in one model And then have that delegation into the org and the frictionless adoption. So we believe that's a lot about That that's a ton of value in my opinion, right? Like I wish this was around 10 years ago Right, like that's right. I mean this is going to save people so much time and so much heartache and just toil, right? Like that's We're you know, redhead. I think is very good about breaking down toil into manageable pieces So I didn't ask you a question, but No, no, that's okay So the the the partner value is we we've been working Many many years with a lot of these partners that are featured on marketplace. So this isn't this isn't new for us And they've had their Their applications featured in our ecosystem catalog, which we we still have and that has our certified hardware software and also our cloud services and But it's not e-commerce, right quite simply. It's not e-commerce. So when um, ibm came into the into the full I guess this is the way to put it or you can say when they purchased We think of the opportunity to work with them to build an e-commerce offering And so what does that offer now? Well, our partners have a digital route to market That we couldn't provide them in the past and so this is it's excellent I mean they've our partners are very dedicated and they've built these operators for their applications And we want to give them the ability to have that awareness The ability for consumer discovery a customer discovery, right? So that they in the first step of the process a customer can go into one place and to be able to look at a variety of offerings We also they get the chance to work with new ibm clients quite honestly I mean, they do have that opportunity now For ibm clients that are becoming more focused on hybrid cloud and they're part of that mix So there's there's quite a few Offerings we we also do have co-sell incentives. We have co-marketing programs But the the bigger opportunity of having that e-commerce And and the ability to have larger awareness and probably greater spend within a customer base That they they wouldn't have been able to have before is really important in working well for them Yeah, let me let me add one one dimension to this key. I think you did an excellent job in describing the business opportunity dynamics around this and as I said earlier, this is a huge part of why someone might participate in in such a digital environment and in an ecosystem There is another point of view in this that I just want to be transparent about because we are we are talking openly about this with our partners If any software business and of course increasingly now software businesses are not just driven by traditional software vendors, right? We see more and more actual enterprises who used to be more from a vendor point of view a customer They would buy our stuff, right? They are now getting themselves into software offerings because they develop intellectual property and then someone asks the question Can be monetized that and often the question answers. Yes, of course And this is how many innovative industry solutions are created. So basically, but any any software vendor Fundamentally has to ask themselves three questions for their business in a cloud point of view There's the question of on how many clouds do I need to be to reach all my customers, right? That's the addressable market question and and there is a severe cost to this You typically any software vendor for the entire history of the software industry has always made a decision of I want as many platforms as I possibly can support But there is the constraint of how many can I actually support right and cloud works the same way It is actually expensive to being able to have your offering on aws on Azure on google and on a bunch of regional clouds. It gets prohibitive very very quickly Um, so there's that dimension addressable market. Then there's the second dimension, which is Strategically, what do you want to run your business more? I think we have seen as these as these public clouds We call them hyperscalers because they are hypo As they get into more and more technologies more and more industry solutions They actually start to compete with their vendors and partners on that environment And if you you want to get an example talk to anyone in the retail business How inclined they are to run their business on aws Which who they probably see amazon the retail operation is one of them chief competitors, right? So there are these also strategic considerations We have seen that on aws in their desire to serve customers and offer innovation They are offering services of popular open source technologies That happen to have vendors that drive these technologies who now suddenly find themselves in a compete relationship with the platform on which they run That's not a great position to be. It's almost overnight in some cases too, right? Exactly. So if something like that happens You want to be you want to have a plan B, right? You want to you want to have you want to have options and and I think if you have built in hybrid cloud choice into your strategy Then that gives you options Whatever they are and then and I think the third dimension is also The innovation component. I mean any any software business the life cycles if you look at product life cycles I'm a bit of an economist when it comes to this product life cycles have shortened dramatically Oh, yeah, they're they're maybe now measured only in years in some cases even less than that until they get replaced by something better That's just the rate of innovation. So if you if you look at it from that point of view Your ability to innovate and deliver differentiation Depends on your own creativity and your resourcing and your funding But also on your ability to leverage innovation that's happening out there And if google tomorrow comes out with some super awesome machine learning Capabilities that you want to use and now your entire app is written against let's say azure I'm not here to bash AWS all the time Then you will have a hard time tapping into this because there are integrations, right? If you are already on google and you're already familiar your engineering team is familiar You know how to deliver service and quality there It is much easier to tap into this. So there's also that strategic element to hybrid cloud and and I really see A lot of vendors who didn't have to worry about most of this They're really getting pressure now from their customers as we said earlier who now make the intentional choices I don't care what you run your software, but I care what my data lives I want my data to be in azure because I trust these guys and I have some extra Arrangements with them. Now if your thing doesn't run on azure, you have a problem, right? So I think there's there's a lot of these dimensions were from a vendor point of view Just getting to hybrid cloud is a huge value And then on top of that you add that digital road to market that Katie talked about that actually makes it real, right? And I think that's that's the promise that we deliver That said it's still fairly early if you look at the inventory in the marketplace, which we're going to do in a minute, I guess is Very focused on the application development set of use cases right now We are working with many of our partners that are actually more driving business solutions to also become available in that In that same motion. So it's not just targeting developers It's also for just enabling the enterprise at large to run platforms and solutions Just help them to run their business battle and develop innovative applications Awesome. Is there anything else we want to mention before we dive into the demo? Yes, I do have one biggest quick point Which is the marketplace right now is only available to north american customers Okay, keep that in mind for those who are now yeah for now We have a geo expansion in our plans. Um, and and hopefully we'll be able to announce more soon But just wanted to keep that in mind It's a good point But then we can go off to the demo. Yes Let's try it out. Let's see what this marketplace thing's all about And now chris I can start with sharing my screen. Correct. Yeah, go ahead. Okay, wonderful So for everyone I am going to just show more of the navigation And what you're able to see and find and discover and when we start to move into Actually seeing the use of a trial on a cluster then large is going to take it from there So I am going to now share my screen The screen sharing dance. There we go And here we are And I'm guessing at this point. We are all good I see the marketplace. Yes Okay, great. The only thing I cannot do is move this lovely little function here It's because I'm not a zoom user I'm sorry, but that's okay. Be unless you're in the browser. It should be movable. I don't know I don't know We'll we'll leave it there for now not to disrupt anything. Um, so when you start to take a look here As larce mentioned We did recently receive a design award both those that are working On the ibm side the design team and also those team members on redhead as well Very simple aesthetic here and in user interface The I think one of the best features is the beginning right at the top here Anything you want to find is is right there.  Um, so if there's for instance, if you're looking for Dynatrace and you type in and immediately You now have your tiles featured of what's available for Dynatrace And that's just a simple example of looking for one specific vendor We can opt out of that and now we can return back to our our storefront and There are many different short videos slash documents that talk about how to use marketplace Um, you can see those featured here. What's new within marketplace is also updated I love the fact you have a blog associated with it. Sorry to interrupt, but yeah It does. Yes, it does and that and primarily because we have a lot of Updates within the site. Um, and that's the best way for us to get the information out So yes, we we do have a blog as well. Um, you can see when I mentioned we have the 12 categories Featured here. Uh, so very simple again, if you're looking for use case You can quickly click on a use case here and then you can then access the information That you need. So if I go over to say database Now you're going to see the list of those available within We have 17 products featured here and I'll get a little bit into more all of the various different Information featured within each one. I'm just taking a quick look. You can also In a and a nice user experience here be able to Also break it down into various things you're you're seeking And so you can look for various trials. How you're going to purchase Ratings, we do have user ratings that are also noted here And then it goes back to so you can filter by vendor as well. So It's very easy to use. So now I'll go back and I am loving how much My phone wants to pick up my conversation um The other thing that we feature if I go back to the storefront that I wanted to show was we have data sets Okay, we got about 120 different data sets as well. So this is new this came out Oh, goodness. I think maybe September of ours. Did we talk about data sets in September? No, I think I think they came around around the new year The new year. Yeah, I right. Correct. We went fully live in the future. Yes It's just been one of those years, right? That just keeps on coming But we did Announced it since you're right around the beginning of this year another great feature um For those that for developers are looking to find something very easy to look at I mean easy to use and so there's a wide variety of data sets and I Believe in the next half of the year. I'm going to add more I think those are going to be more of a paid service, but right now our data sets are free And then as you can see we start to now looking we dive deeper into each one of the use cases So let me just take a look here. Um, I'll just grab one. Let me go with couch base So you take a look here into couch base and as I mentioned Very rich documentation within this section. This is what we're really most proud of And easy to navigate straight away. You'll see up on the top.  Take a look. Um, and be able to actually see user information Complete overview of what it runs on On the left. We have all of the certification standards That are met What level of operator? Does this also deploy? and Then you start to go into we have more of the pitch about the partner product And and offering and then you have your pricing. So it tells you how many cores Which you're going to need what kind of subscription it is and then you can click to view all of our pricing options So if I click on that give you even more So now you're going to see, okay You have your free trial that you can access for the 30 days and then you have your two different offerings based on what it is that you're looking depending on the amount of cores that you need And so that it also gives all of the terms for the license agreements And if you need any questions that you want to ask as well We have an f a q section But you can also at any point ask a question within our support section So very simple. I'm going to stop right there chris though because um as a as a user Maybe you might have some questions that I haven't quite answered yet or features that I haven't shown um So I mean you've you've covered more than I could possibly imagine but the I am curious right like where do the ratings come from? I know they come from users But like are they like in their console on their cluster and say, oh, this is awesome or are they doing it in the marketplace? Where is that happening exactly? Yes, that's a really good question. So um, I am going to respond in what I believe although I might say Lars if I'm wrong, let me know but I I do believe you can you can provide a um review here But I do think it happens in the open shift console with an open shift. Is that correct, Lars? It's actually it's it's it's an it's an aggregator service that that what's happening into That speaks to the technology and the product more broadly um in because we didn't necessarily just want to limit the I want to follow the lead of other people to the Still relatively small community of open shift users out there right a lot of these technologies to have very broad reach And so we didn't we didn't want to exclude that from that point of view Open shifts a great place to run these things. Hopefully the best place to run this thing But many of these technologies are used in kind of cloud native environments or even beyond that broadly, so they mostly come from a Kind of a as I said an aggregator that looks at lots of different places where we use happening We're looking to build that out Within the experience as I said Katie within open shift itself right now. We don't really have that in there yet Um, and I think this is this is part of that functionality that we talked about earlier about how do you enable An organization today we focus on more of a policy based view of what is approved to use How can you delegate budgets and approvals within the organization? I think when many are many large organizations, there is value and oh someone was successful with something Give them a way to express that so other teams can follow that lead right and reuse that sort of knowledge I think this is clearly something we want to enable, but that's that's a little in the future It's one of the areas of improvement we want to build into the future awesome And then from there, I mean with with support Again, all of our operators that are available here in marketplace are certified on on red hats On open shift. So that means you have red hat support You have the vendor support and then you're also going to have IBM support here as well So you're fully covered And there is a full team that supports the marketplace Out of IBM. So No question about if you have any challenges Well, quickly click on that But you have full documentation as well and then you and then in this case management Nice. Now in terms of if you want to create an account There are multiple ways in which if you already have a red hat account you can Log in with your red hat user account, which is fantastic. Um, and so for instance, I have a red hat account And so I can simply log in. I'm recognized And now the information So one account for everything I simply added my password And now I'm into in accessing everything within marketplace with a red hat account Which is fantastic. Um, if you have an IBM account, you can do exactly the same thing And if you have if you don't have either Then you can sign up for a red head marketplace ID So there are three ways to enter this portal But for most in most practical, I would say would be to log in with your with your red hat account So all customers would use their existing ID to enter into Into the portal and now you've got access to a variety of different offerings And this like for instance, I I've downloaded and done a few trials myself But you can start to see which you're what you have available Although it might have been some time So at this point is where I'll I'll transfer it over to Lars because he does have An existing cluster and has a trial that he can he can walk through unless there are any other questions that you have No, I don't have any more questions. Go ahead Lars All right about 13 minutes left on the hour here All right Now we will be in the hands of open chef to stay on time with that. Let's see how that works Does that come through? You should A beautiful Ashley provisioned open shift cluster that we have we put together for this. So I just wanted to Show a little bit What Katie showed was the experience on marketplace of redhead.com That's the what we call the public marketplace as we said as she said marketplace select Is basically a customizable version for an enterprise with their own logo in there with the digital controls In any case the architecture is The marketplace manages an inventory Manages it manages your purchases your users And it speaks to open shift clusters. So an open shift cluster can be hooked up to the marketplace and by doing so You now can access the marketplace from open shift itself. So I wanted to start with showing that So if we go here into the operators On I can go into the operator hub which shows basically all the software that's available For instant deployment within this cluster and you see the little tags here It's as community marketplace the ones without attack or officially certified from these vendors So I could go down here and sub select. Okay, let's look at only what comes from the marketplace and let's say I want to use a Database Katie used the database example And let's say I'm really excited about operators. So I want I want a database with these autopilot capabilities So I don't have to worry about The distributed system aspects of these things That gets me to uh two three couch base katie showed coachy coach base. So let me go into crunchy So I can basically kick in here I get a very similar ui to what I did With what katie showed and I can actually go out to the marketplace. This leads me out to the marketplace side Or I can install it from this cluster right away, right? So that's the experience within open shift now similarly I can actually go and in the marketplace. This is now my account, which I don't know if the same or different katie It could be so in the marketplace. You have this workspace section Well, well, you can basically look at what is my software? So I went in there like yesterday or two days ago and just hit the trial button for crunchy So you see I have one product here says crunchy trial try a crunchy pass quiz Trial expires 28 days. I can click on this thing And now what can I do with this trial? Right? That's the right question. Are there any limited features or anything, right? Exactly. So and now I'm basically getting into into a side of What did I use that trial and and you see here it is actually deployed on a cluster So I basically took this from the marketplace ui if we're basically I press this button here install operator So if you click that button, um, you now can choose Well, that looks familiar different channels or approval strategies And then you can choose one of the clusters that you have registered So I have this cluster that just showed you and now I can just pick a namespace into which I want to put it Um, of course now this one is already running it, right? So I would have created a namespace then you click install And then the operator magic takes off and however long that takes depends on the software how complex that is You have your thing running, right? So that's that's basically that experience Similarly, I could go for the existing ones. Um I basically see all my software inventory for each of these products. This takes a while So let me actually go back into open shift while this is loading And if I go into the operator up here, I can see the installed operators See the couple On there's the marketplace operator itself which creates that connection So these two things can talk to each other very very securely And here's my drop crunchy postgres scale in the my test namespace So I can now go into this thing and for example, whatever deploy an actual instance of a cluster of postgres servers for my application Right, right and that way it could then also be made available to to developers, etc etc So I think it very much delivers that frictionless experience that we talked about and all I have to do for this is I basically have to take an open shift cluster And connect it to the marketplace, which is actually a fairly simple step You need permissions on the on the cluster because of course that thing is kind of running as a system level service on the cluster Um, so but but basically it's about a port. Don't look at that. It's just the name of the secret good Um, and then a few commands We're going to make this experience a little more slick right now It's still like following just a few oc commands basically on the command line Or you're locked into this cluster But it is a really like it took me like three minutes honestly to to to get this going and then I could go in and And actually deploy software on that. So I think that's actually pretty cool And now as a result I had my I had my clusters here Um, it says aws right you would you would of course have as which I said earlier any cloud any environment It would just I know annotate this properly. I can go straight into the console of that cluster from here And of course, I can I can detach that so that's in a nutshell the experience really from the marketplace You have a view of what are your clusters? What's going on them? Which is which is simple and that's by design. We want that to be simple redhead offers Very comprehensive management tools if you really want to manage everything that's going on in the cluster like like advanced cluster manager And and you can also basically see it on the cluster which is is important to An end user because that makes it very accessible But it's also important to a vendor as we talked earlier because now they are actually exposed out with the end users They're in the real estate of the product, which which is a big big big point for them That they're out in in the face of the user. Yeah, so that's that's what I wanted to show Happy to answer any questions on that No, I mean that that was very comprehensive review. I mean what is what is the simpler process look like right because I'm pasting on five commands seems pretty easy to me Yeah, no, I know Yeah, I I would agree with that. I think we could we could of course and we got this question occasionally Um could a cluster pre-install that marketplace in a question. Oh, yeah, yeah, so you could yeah, you could potentially but then We're I think we made open shift more modular with version four than it was before and that was intentional because customers want to control As to what's running there and then of course you still have the secret account level exchange We couldn't automate this away So but I mean, you know, all we're always open to hearing how we can make this experience better And how we can make it more exciting For sure. All right, stop sharing wonderful so You're gonna increase productivity. You're gonna, you know, create You know simpler hybrid cloud and environments for art that creating A database distributed across my entire fleet Is a couple clicks away, right and I can just start adding members as my clusters get spun up like this This seems almost too good to be true Right, like what was the what was the motivation? From the either the IBM side or the red hat side to like build this thing, right? I know it's a it's a great question because I would say from a from a let me start off with the right hand side Because obviously I've been working with redhead for so many years. I think 18 plus now um redhead has always been about choice and about openness and about somewhat being switzerland As in neutral to others, right? Right. Um, and so from an ecosystem point of view, that really means like We will partner with anybody out there that our customers wants wants us to work with And we were simply speaking there. So that's where that openness thing came from now. Obviously hybrid cloud Is now really real. I think hybrid cloud is a lot more real with containerized applications because containerization gives us the primitives that enable consistency portability and that level of let's say Opinionation in that allows us to automate things, right? So it really allows us to deliberate cloud service in these different environments So that was the second ingredient. So openness plus containerization on and then there's really that That commerce dimension that Katie talked about Which is actually a business in itself like selling someone else's products. That's a business and you need to be able to do this And this is not In full in full transparency. This is not a business redhead has ever been that So we have we we just don't do that. We have never done that. We don't sell other companies staff Internally sometimes we're thinking that our own sales channels are not selling enough of our own product Not to mention other companies products. So we were actually Looking I was looking for um, how can we serve that need? While redhead continues to not be in that business IBM in parallel as they were working on the okay, we're going to acquire redhead But then run it as a separate entity basically they had invested into a marketplace that was Reusing many of the things that they had built for IBM cloud. So that's where that comes from IBM isn't that business Of selling other companies products and they've for example, they've sold a lot of redhead over the many years In that capacity IBM also was already in that Digital business and they were in the cloud business with IBM cloud. So they funded a new initiative Around building a marketplace that is designed for every cloud and then as we got into the picture We discussed, okay, how do we partner on this maybe and what came out of it is what we showed you here today Which is about a hybrid cloud marketplace that is very much focused on open shift and users open shift as a deployment platform In order to truly deliver that cloud-like experience That makes the marketplace very very valuable. And so that's really the the inception of that um, and of course, there's a good Overlap and correlation between customers of redhead and customers of IBM So I think also from a go-to-market motion of how we actually communicate position deliver value We can collaborate very effectively with this And and basically stay true to our identity at redhead continue to be neutral but also basically Tend a little bit into the trust that enterprises award to IBM for handling their money Because that's basically what they do here in this case If they if they buy things in this digital way awesome, so we only have Less than two minutes left. So do you want to talk about the future at all? Or is already at a good wrapping point you tell me? Oh, yeah, I mean I I mean honestly With only two minutes. I cannot obviously talk very deeply But I might I can share a couple areas of focus that that that we have Of course one one area of focus is Continue to build out the inventory of the marketplace much like I said earlier, right? A platform is only as useful as what you can do with it for the marketplace That means things in there So if you have specific suggestions specific needs if anyone wants something in there Let us know and we will work with that vendor. So that's part one. We're continuously doing that Um, as I said earlier, we are expanding the inventory. Katie you touched on data models I mentioned some of the more software as a service premises that wouldn't necessarily run on the cluster But it's still adding value to the overall experience and to what what the customer tries to do with the cluster So that's another area We'll be looking to expand from a functionality point of view. I think it is all about On-demand models spend aggregation across cloud. So we're really getting we're doubling down on some of these business model capabilities Especially for cloud services Next week is redhead summit where we will make some announcements in that area And the marketplace is always part of the total solution at at a minimum Like as the billing engine of how you get your aggregated bill In some cases also as part of the overall experience as to how you would access a cloud service That is delivered by redhead or by any of redhead's partners So that's another whole area that we are opening up as of next week In that area is a lot more to come next week check in with us And we can of course come back here or in a couple minus and and talk about that more if there's interest Especially when we've expanded into more geos as well, right? Oh, right. Yes. Gio expansion is very important Yes. Yes. It's somewhat limiting to only be in the u.s. Especially as a european I can say that with a lot of passion But we will we will get there. We will get there. We have applied and we will be assuming and hopefully lots more different countries Awesome. Well, we need to clear the channel for our friends over at dev nation. So, thank you very much, katie Thank you very much. Lars for coming on. Thank you audience for watching And we'll see you next time on in the clouds Thanks for having us