me onto the platform. Essentially isolating that workload, making sure that the costs associated with that software are independent and we're getting a lot of excitement from clients on that. New flexibility like we've never had before. Multi-flex pricing allows in-country to consolidate, MIPS up for a mainframe client. This has been a big ask and so we announced that as well. Blue Mix for the first time. Full Z participation now with Blue Mix. So that's another new thing we've added. Another key pricing action we've taken is around memory. So in this new system, we've got 10 terabytes of memory as a maximum on the system. Before, the maximum was three terabytes. For many of our clients, that'll mean they can go three X to five X what they're currently running on their systems. So we really want to encourage that. As we see more Linux workloads going on, we've added SMT to the platform. We think there's gonna be a lot more Linux coming onto the platform. It'll help with Java performance as well. We've taken the axe to memory pricing and for many clients, it'll be 30% of what they paid for memory in the past. So you could basically, for what you used to buy your memory for, you could now get three X. In fact, if you get more than that, you'll see even bigger saving. But for many of our clients, there'll be dramatic savings around memory and that's gonna deliver immediate performance in peripherals that'll mean less pressure on the processes, it'll mean we're spending less time moving data around. And we're seeing very large projections on performance improvement because of that additional memory in the systems. So mainframe cycles are obviously a big deal for the Z division, big deal for IBM. I talked to a number of customers at your event and several said, yes, I'm buying, not I'm thinking about it. One, in fact, I'm buying four site unseen. So that's great. It's great news for IBM. It's great news for the Z platform and I think great news for customers. So gentlemen, thanks very much for coming to theCUBE. It was really a pleasure having you. Great story. Thank you guys, thank you very much. All right, keep right there, everybody, we'll be back. This is theCUBE, we're live from IBM Interconnect at the Mandalay Bay, this is theCUBE. It is a live mobile studio. We bring it to events and we say we extract the signal from the noise. What we do is we get the absolute best guests that are at those events. We bring them inside theCUBE and we talk to them, we have a conversation. I think the difference with theCUBE is that the interviewers are active participants in big data. So it's less about trying to explain what big data is and more about relating what's going on. So we're a big data driven organization. We have a data science team that allows us to see not only what's trending broadly with the public but what's trending in very specific areas in our specialty in tech. That allows us to vector our analysis and relevance from our research and journalist team into everything that we do as a media company. We really wanna make it fun, exciting, but more importantly, extract the data from the guests and extract that metadata and share it with the world so people can use that information to better themselves, better their companies. More importantly, connect with other people to do more business, to define more about the technology. And for us, this is the future. I do a lot of these types of interviews. I've spent a lot of time with the press and it cubes a lot of fun. It's ESPN for tech. I think tech's evolved to the point where people wanna understand the personalities behind the technology, which probably wasn't that interesting 20 years ago. I think they made it a lot more entertaining, a lot more interesting, as well as putting some technical meat on the bones as well. The value of an independent news organization at an event is that it allows our audience to have a perspective that's balanced, that it's not just the vendors talking to them. It's the community. It's analysts. It's technologists. It's customers, practitioners. So they get a full perspective that's unfiltered. The benefit of theCUBE is place for conversation with people to connect with each other and to learn about things. And it's a revolution in media. We look at the technology and the people behind it as tech athletes. Those are the folks making the companies, making the technology, really creating the new value in this modern era. And it's fun, it's exciting, and more importantly, it's very social. These days, with social media, people looking to not just read articles, which are great, and obviously SiliconANGLE does a lot of that as well, but being able to see high definition video, very intimate interviews with entrepreneurs and operators, innovators in the industry, I think is really important. So the job you do in getting this out in a very timely way, I think is really important. We always know that your view is right until you hear a different perspective. So you're always interested in, give me some neutral perspective, help me see it from a different light, and maybe ask a hard question or two that I might not have considered. In that sense, that independent voice that's always ability to have sort of independent, audited sort of perspective of the world, that's always just good. The Cube has been called the ESPN of tech, and really our vision is to cover every event that's out there. We really truly want to be a global organization that is at every event, extracting the signal from the noise, being on the ground, giving our audience a sense of what's happening at that event, but also providing analysis and insight worldwide, literally for every event that's out there. You know, I love it. I was actually telling John and Dave, every time I come back to the Cube, you guys have new toys, new cameras, everything's getting bigger. So, you know, having been on it for several years, almost from the very beginning, it's always great to be back, and you guys do an amazing job, so it's wonderful. It's about connecting with people, and that really is what it's all about, having the conversations in a very social collaborative way, and that's what makes it so exciting when people are watching. Live from Las Vegas, Nevada, it's theCUBE at IBM Interconnect 2015, brought to you by headline sponsor IBM. Okay, welcome back everyone. We are live in Las Vegas. This is theCUBE with IBM Interconnect, special presentation of theCUBE, our flagship program. We go out to the events and extract the signal from the noise, and I'm John Furrier, the founder of SiliconANGLE, joined by co-host, co-founder of wikibon.org, Dave Vellante. Our next guest is Scott Johnson, SVP of product at a company you might have heard called Docker. Docker's a great company, welcome to theCUBE. Here at IBM Interconnect, so we are going to be bringing theCUBE to Docker cons, that's just news hitting the wire, breaking news right now. theCUBE will be up at San Francisco for your event, which your event was, always starts out as these small events.  Now it's huge. What's going on with Docker? Obviously IBM's embracing you guys. Redis, Docker, these are the new buzzwords inside the IBM camp, which customers are embracing. Let's talk about the story, what's going on with DockerCon and the business, and here at IBM. Absolutely, and IBM's been a phenomenal partner. We've been working with them for almost a year at this point, and so in some senses, they're coming out a lot of the great work that's been going on under the covers, and it really spans across the board. There's product integrations that we can talk about. There is a wonderful go-to markets with their services team, and let's not forget support, which is super important for enterprise customers, and we're a 90-person company in San Francisco, so having that IBM support machine behind you matters a lot, so we're super excited about that relationship. DockerCon, I mean, just start with the community, right? From zero, less than two years ago, Docker's coming up on its second birthday in March, by the way, so watch out for that birthday party. Docker, how has- We'll look for the invitation. That's right, you should be receiving one. 149 meetup groups in 49 countries around the world with 32,000 members from zero, and so from there, we bring the community together for DockerCon, as you know, and last year, our plan was for 500. We're really worried if we would sell out, not only do we sell out, we had a waiting list of twice that, and as you know, fire marshals kind of come in, kind of calm everyone down. They had no room for the queue, we had no room for the queue. There's no room. There's no room for any of us. So, it was super tight. So, this week, up to the bit, we're looking for- And you've done some financing, so you got some big bucks under your belt. There's big fat checks from Jerry Chan and Gray Law. You know, kind of spend it wisely, spend it wisely and carefully, and so we'll be expanding, we think about on 2,000 participants, but already ticket sales are off the charts and sponsorships are through the roof, so who knows? Might have fire marshals show up again. Yeah, I mean, we're really proud to be just witnessing and be part of that growth because watching, and we interviewed Solomon a couple of years ago, and then that's before Ben came on board before Jerry did the investment. You can see the movement. It was some good love going on with Docker, the approach work, the timing was impeccable. Obviously, the idea of a container's been around for a while, but the open source, perfect storm of open source formula with the container, at that time, you certainly hit that funnel cloud. You guys just got sucked up into the vortex. I think you're exactly right. It was a lot about timing, right? Because the conversation at the time and then still is about applications, app velocity, how quickly can I get my application, my innovation into production? And there's lots of great tools trying to solve that problem and Docker came along. It took a concept that had been around containers but made it super easy to use. You don't have to be a kernel jock to use Docker. And before you had to go in and start flipping C-group bits and namespace bits, Docker just made it super easy to do that and for as an added benefit, once you use that container technology on your laptop, you can snap that image, move it, deploy it anywhere. Scott, I got to ask you, because this is something that I've been kicking around and introducing to the folks here. The notion of DevOps has certainly been a catalyst. All the hyper scale, web scale, whatever you want to call it, has set the table for the DevOps. Now I'm going into mainstream enterprise. Absolutely. So the words stand up. What does that mean to you?  That's a geek term usually in the cloud world. Hey, I'm going to stand up some infrastructure. Hey, I'm going to stand this up. It implies it's easy. It does. This is now coming into social media. Anything that's native cloud or hybrid cloud related has to stand up easily, which means one, get functional, operational, functional, operational and integrate. Talk about what that means. When you've seen the revolutions of other cycles. That's right. Talk about that dynamic, standing it up. No, I think that's a great topic. And honestly, there's been a great 10 year, a decade long education of the market in standing up infrastructure, right? And Amazon and VMware have educated the market on ease and convenience and most of all speed, right? No longer do you have to talk to Dell or any of the vendors, get a box shipped out, provision the box. You should take loud cloud back in the day. It took three months to get a box from Dell provision in the data center. Amazon and VMware completely redid that equation. And now we're seeing that same movement standing up apps on top of that. And Docker's part of that conversation due to the focus of DevOps focused on the application, but also because the market's been educated thanks to VMware and AWS on the value of speed. They're like, speed at my infrastructure layer, outstanding, that changed their world. Now I want speed at the app layer. Docker's coming in to change that world. Well, the other piece of it is you think VMware, you think private, right? On premise, you think AWS, you think public cloud. And what you hear at this event is hybrid. You know, moving it from here to there. Yeah, laptop, but then I can provision it. I can move it back if I need to. So that's sort of one piece of it. And then the other piece Scott, you hear a lot is enterprise grade containers. Okay, so what is all that mean? Yes. I think both of those are great examples of basically we're in an early market, but it's maturing so quickly. And IBM is obviously a big part, it's been a big partner in that. So the first one is really like, if you're going to deploy in the enterprise today, they want the flexibility to deploy to the cloud, the public cloud someday without rewriting, but today they're going to deploy internally. And what they don't want to do is build a stack, stand up a stack internally, only to have to rewrite it, show the economics or certain policies, allow them to push it to the public cloud later. So hybrid cloud is part of that, that stepping stone solution of like, you can deploy safely on-prem or in the hybrid cloud today, but you have the option of going public tomorrow. You know, in terms of operationalizing or maturing the technology, you're absolutely right. Look, Docker is less than two years old, right? And I've seen a lot of hyper growth, it was at Netscape, it was at Loud Cloud Officeware, it was at Puppet Labs, and so I've seen a lot of hyper growth enterprise technologies before nothing has taken off this quickly. And honestly, we're still catching up with so many of the expectations. And so you see a technology that landed with developers that was beloved by developers, could have solved great problems for them at the desktops, now those applications are heading towards production. The enterprise says, great, but I need monitoring, I need support, I need failover, I need logging, all the enterpriseification, if you will, the application. And that tooling is just, it's still being built out. Yeah, we were talking before we came on, and certainly have, we've talked to Pat Gelsinger about it, VMware, that, you know, this is decades, decade or decade long runs of innovation, exactly right. So when you talk about developers, there is a overhang on where the innovation kind of lands or grows or fruit comes from the tree. We're so early, I mean, you guys, I'm maybe overstating the ramp, there's not an indicator of where we are in the cycle. So give you a perspective on that, because you know, there's a new time, things do grow faster, sometimes weeds grow faster and we've seen that on the web app side, on consumer apps, but we know what developer tools and frameworks, this is downstream, is where you get the benefit. So how about that timing, this first five years or first decade, we've actually been surprised, so I've been with the company a year and I expected, we had 12 to 18 months before the enterprise hit, because I was thinking similarly, like it just takes time to mature the technology and the people to get comfortable with it and for enterprises to say, all right, now I have the tools to deploy it, and it's been neck snapping how quickly we've been pulled across the chasm, pulled across the chasm, like we were not expecting this quick adoption. So I think a lot of it is due to the market having educated the enterprises on speed, as we were talking about before, like they've been educated that, wow, Cloud gave me this kind of speed, Docker can give me that kind of speed, so VMware and AWS had to do a lot of education over that 10 year timeframe, we're not having to do as much education this time around because the mapping or the analogy between the infrastructure layer and the app layer, it's pretty apt. I will say, just to tie that off, is that it is not kind of one-to-one just take your apps and put them in Docker, though. I think what is going through the market right now is an education that this gives you a new way to architect your apps, the microservices, Cloud Native, a new way to architect the app, and that is requiring some education. You're trading monolithic app complexity for API contract complexity, no such thing as a free lunch, but if you do that, you move faster, you deploy quicker, you work in smaller teams, the transformational benefits are off the charts. Well, and you're talking about DevOps before, a lot of the DevOps guys, a lot of them come from ops, and they're freed up and they're smart people and it's like, okay, hey, do some Dev, and now there's this giant pent-up domain. That's exactly right. Which in hindsight, it's 2020, we should have been able to predict it better, but it was totally unpredictable. The need for speed, right? I mean, if you can go back to your application organization, if ops can go back and be heroes and say, it used to take nine months to deploy an app into production, this is a use case, ING, used to take the ING nine months to deploy an application into production. They went through a complete transformation, Docker is proud to be part of that, they now can do that in 15 minutes, the same deploy from nine months to 15 minutes. I think what that does to your innovation cycle. It's changing the game. I mean, it's not just 20%, 30%, it's orders of magnitude. And what are they shipping down in the life cycle of their apps? So this particular printing and then ship or is it more, they actually have completely retooled the organization and they can do continuous integration, continuous delivery, ops guys are involved building automation frameworks for them and they can push from a developer commit, that commit can be ready to go to production in 15 minutes. Yeah, so that is the cloud way. So as a new guy, yeah, Senior VP of product, Jerry Chen was the new guy at Greylock, does his first investment.  Will you have the sophomore jinx? And we laughed about that, you know, all joking aside, it's a good deal. I mean, in some way you took the job. I'll screw it up. Like, no, you got a lot of pressure. You got a lot of pressure. Well, one, you got to worry about not screwing up because you're going so great right now. Do you let the ship just ride? Do you float down with the growth? And how do you manage that process? Serious questions, okay. You've got all this massive growth. How do you shape the product? What's the product organization strategy? In some cases, we get the wind that you're back. Don't change it. Let's just move it where you want it to go. So how do you do that as a product leader? Well, I mean, it's also, let's be clear, the talk is a community effort, right? So I am a product leader at like scale. But it's like, we've got Salman who is obviously a phenomenal visionary and CTO. We've got a phenomenal team around the product organization with the engineering organization. And we've got this community that is, gosh, millions strong that's giving us feedback early and often in terms of where to go. And so, I think what we're finding is as we mature from open source kind of developer landing points in the organizations in the enterprise, that there's a new set of users. There's the QA users. There's the DevOps users. There's the operations folks. And those folks have different requirements and different needs or that complement what the developers need. So you also have a pressure on the biz dev side. Everyone wants to marry DACA right now. You're the bride of tech and you guys are winning, right? Well, next time it's who's heads up our BD organization just as a phenomenal job of trying to play nice and play well and at the same time work well with partners and the IBM relationship is a great example. All right, talk about the IBM relationship. Yeah. Yeah, no, I'm sorry, it's going. I want to understand the nature of that relationship. We talk about enterprise icing. Yes, that's right. What does that mean? What do you guys do? What's IBM bringing to the table? That's right. So I guess we'll take it kind of, there's a lot of different pieces, but we'll take kind of the most concrete cases in front of us and that we were, as you know, kind of open source is driving the adoption ubiquity for the organization to make money, to pay the developers as well as the investors. We're selling, building and selling commercial product, licensed, commercial licensed product. And we announced that in December at DockerCon Europe and we're in beta now with that product and that goes GA in Q2 in a couple of months. IBM is one of the major go-to-market partners with that product. By that I mean they are taking it into their channel. They are providing frontline support. They are doing product integrations around that product, products called Docker Hub Enterprise. And the product allows operations teams who need the tools to manage all these open source engines and containers, gives them the tools to do that effectively. And who knows enterprise adoption better than IBM? So we're super excited about that partnership and it's the entire value chain, from sales to product to support all the way through. And so we're going to be talking more about that in Q2 obviously, but that's one big one. IBM has done a number of other integrations working with us. They've done integration with BlueMix so that BlueMix is now a native Docker format. So developer again, develops the application on their laptop and developer in a Docker container, launching on BlueMix without changing it, right? Good to go. IBM as well has done a lot of investments in the DevOps spaces you're well aware. And there's a very exciting integration with their Urban Code platform to make Docker a native container on there. So Urban Code, which is managing the CI DevBuild test process for enterprises today, does a phenomenal job at that. Now if you are building your application side Docker containers, they just drop into that Urban Code process and flow right on through. So those are just some simple examples, but just it's super exciting to see kind of the resources at IBM aligned behind containers. And I'd be remiss if I didn't put one more out there, which is a lot of the market right now is x86, right? IBM of course has the resources and the community chops. They put together community versions of Docker for their mainframes, for power and Z. And so you're seeing Docker everywhere, which is Solomon's original vision, through the community and partnerships really become a reality. Because again, 80 people in a turtle can't do all that work. We just had our C guys on. It's Linux, it's Java, it's the modernization of that whole platform. I remember back in the 80s, I guess, the economists would say, you know spending on information technology, it's great, it's growing, but we don't see it in the productivity numbers. This is before the whole personal productivity boom. And then boom, they stopped talking about it because the United States became a dominant force in the world adopting technology. Productivity boom was enormous. I feel like from an application development standpoint, we are on the cusp of a new productivity boom. I wonder if you could talk about that. I agree, I think it's exciting because apps, to see the productivity, to see the results of everyone's efforts, the apps have to get into production. They got to go all the way through the life cycle. And you saw basically developers lead with Agile and Scrum and the tools around that. And that was great, but if they lead and go fast and the apps stop moving from release into production, because ops isn't there yet, then where are we seeing the benefits of that productivity, right? They're not getting all the way through. I think with the DevOps movement, with tools like Puppet and Chef and now Docker, we're now able to provide that end-to-end basically platform so you can get the benefits of all this productivity on the human side into the code, into the applications, and all the way through the life cycle. Talk about what Docker means to the world. And you look at the open source revolution. I mean, it could be written that, you know, it's the movement of the century. The modernization of open source, and we're talking to Red Hat about it last week, you get your purists, but new models are emerging. And if you look at the generations, I'm going to be 50 this year. So it's like, I remember when open source was like, oh my God, it's free, I can use it.  But now we're almost in like, you could argue fourth, fifth, sixth generation, whatever, of modern open source, first year citizen, native, I'm a native Docker. This is happening really fast. What is the view of this? What does it mean to the world in terms of middleware, lower the stack? It's the same game, lower the stack, middle stack applications. The game is still the same, but things are shifting. Yeah. How would you talk about that? I mean, it sounds cliche, but Docker is about choice. I mean, if we're just kind of speaking about the kind of big movements, right? Big movements, like Docker's about choice, because now the decision of where to run your application and what resources to use inside the container, those are uncoupled, right? I no longer have my application tied to my specific infrastructure provider or my specific cloud provider or my specific OS. Now I just, and conversely, I'm now free to use any technology that I want inside the container because it's completely independent of the underlying infrastructure. We've got Microsoft doing .NET inside Docker containers now. Who'd imagine that five years ago? And so you can mix and match. It's insane. It's fun. You can use your choice to use best technology for the application and use your choice to where you're going to land that application. Well, Microsoft's learned, if they don't go open source, they're going to be out of business.  It's phenomenal transformation. So let's talk about the network now. So you're abstracting away a lot of stuff for the developers, which is goodness for the spirit of the front end guys and the app developers. The network's still a problem. You've got peering issues. You've got network virtualization. But just look at the scale, right? So networking SDN up to this point has been targeting the VM type workloads. And so great, that's tens of VMs, maybe hundreds. Now with Docker, we're talking thousands of containers flying around, right? And so the SDN, what you see happening in the SDN community is the architecture really being reexamined. Like, okay, what do we need to take into account this new level of scale with thousands of containers and the ephemeral nature containers, right?  It stays there, it stays there. Microservices based applications fire up the container five minutes, tear it down. Fire it up for another five minutes, tear it down. And so the movement, I think, is a very different challenge or design point for the network guys. So we're getting the hook here, but I've got to ask you two quick ones. All right, quick one. In the big data world, it's got data lakes and data oceans. Which lakes and oceans do you like better? You know, I think the whales like oceans, right? So I think the data ocean kind of resonates with our Docker whale metaphor. Awesome, anything about that? Docker, yeah, Docker endorses data ocean. I love that. Second question, what does it mean for you guys here for the show? Docker and IBM. For customers out there of IBM, evaluating IBM. Blue makes us no AWS. They're making a lot of headway. Certainly they're moving them. Absolutely. Absolutely. Why Docker here, what does it mean for the customers? Well, I'm not going to speak for IBM, but if I'm an IBM customer watching this, it's like, wow, IBM is pushing innovation, right? Pushing gradually. I mean, whether it's cloud, whether it's application workloads. And on flip side, if you're a customer looking at Docker, you've wondered, wow, this little open source company and gosh, isn't that just an early adopter thing? Isn't that just for tech startups? It's like, no, the message is that it's ready for the enterprise. And together, I think IBM and Docker will be able to deliver on that promise. All right, Scott, thanks for coming, joining us here inside theCUBE here live at Las Vegas. This is theCUBE, and of course, we'll be at DockerCon breaking news. theCUBE will be at DockerCon extracting that signal, sharing with you. We'll get some space in there. Hopefully we won't be too tight. I know it's going to be packed out. Senior Vice President of Product, one of the hottest companies in tech right now, really connecting everything together. The clue of a massively grown market. Congratulations on your success. We'll be right back after this short break. This is theCUBE with John and Dave. First time on theCUBE. It was fun. We did it again. We did it again, yeah. Yeah, I think what I've come to find, I think my second time on theCUBE is, I mean, it's just such a real time, high energy experience. It's very good because there's no filtering of questions. I was not prepped, other than saying, go and get up there. So it was quite good, it was part of the experience. I think what you're going to get is the real answer. It's not scripted, it's authentic. It really allows you to communicate quickly, your point of view about who knows what they're going to ask you. So I thought it was great. I didn't know what the questions were ahead of time. They asked some good ones. I think some ones that if it was an unbiased thing, a biased thing, I don't think we would have got. And I think that's what people want. They want those questions. And it's hard for us sometimes to ask them unbiased because you're biased by nature. So it's great to get those questions and be able to answer them. Like I said, I love the energy. I mean, these guys ask good questions. And obviously not only them, it's the Twitter feeds coming in from questions from the audience. So sometimes it's a question nobody wants to ask, but they're thinking. So it's good. That's a great way to sort of answer those tough questions. It gave me an opportunity to hopefully share with the people watching. Some of why we're doing what we're doing. So what's going on today? Newseler, message. Email. Calendar updates. Most of us admit to being overwhelmed by informational work. That's why IBM created Verse. It uses powerful analytics to uncover hidden patterns in your email, calendars, and social feeds. 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Hey, this is Brian Saravin, Director of Digital Media for the San Francisco Giants and you're watching theCUBE. Hi, I'm Dan Gordon, co-founder of Gordon Bearsh and you are watching theCUBE. I'm Lynn, Senior Analyst at Technology Business Research. And I'm a data analyst at LifeTrips.tv and you're watching theCUBE. I'm Dr. Randy Fagan, the Chief Administrative Officer of the Texas Institute for Robotic Surgery at HCA. Location, location, location! Here's the location that matters the most. Here, or here, or here. It's wherever this is. To get customers to come here and stay here, you're gonna need an app that connects to all your systems so they can bank, shop, do what they need to do, and you gotta do it fast before the competition does. It's tough out here! You better be on the right cloud. Today, there's a new way to work and it's made with IBM. Andrew Price, our Business Operations Manager at LinkedIn and you're watching theCUBE. I'm Chris Selland, VP of Business Development for HP Big Data and you're watching theCUBE. Hi, I'm Stacey Slaughter, Senior Vice President of Communications for the Giants. I'm in the garden at AT&T Park and you're watching theCUBE. I'm Thomas Minnick, Business Intelligence Consultant within our works and you're watching theCUBE. Hi, my name is David Tishkirk, Director of Partner Marketing at Cloudera and you're watching theCUBE. Hi, I'm Jim Yu, founder and CEO of Bright Edge and you're watching theCUBE. Live from Las Vegas, Nevada, it's theCUBE at IBM Interconnect 2015, brought to you by headline sponsor IBM. Okay, welcome back everyone. We are here live in Las Vegas for a special presentation of theCUBE, IBM, Interconnect. This is our CUBE special program where we can go out and extract the civil noise. The next guest is Steve Robinson, GM of Cloud Platform Services with IBM. He's the Blue Mix guy. We interviewed him last year when he came off the stage announcing Blue Mix. Welcome back, great to see you. Thanks guys, it's always good to see you and always good to have you at our show as well, thanks. So, are you in a pinch me moment, like in my dreaming? Because when we interview, you came right off stage. It's like, okay, we're doing Blue Mix, we're all behind it. Go. So that was our beta event. At that point, we barely knew what we had. We had our Cloud Foundry version. We'd collected a handful of services and then we're like, let's go. So, you guys have been successful. So, just a quick update. I was a great journey, a lot of speed, a lot of rapid acceleration on your end. Yeah, so we launched it in beta. We got commercial terms around it at the end of June. We announced this week 100 services on top of the platform. So, we've taken every piece of middleware within IBM. We've converted into a set of services. We've got some great unique ones like Watson. In November, we announced dedicated Blue Mix. So, software's got a great thing where you can do single-tenant private resource so we can now drop Blue Mix on top of that. And then we gave a sneak preview on stage on Monday, local Blue Mix. So now, local dedicated public. We now have a complete hybrid mechanism to really get the enterprise account charged up. So, I want you to answer the questions. Not for me, I'm just paraphrasing what the sentiment is. Ah, IBM, Blue Mix, that's Cloud Foundry. They're really not committed to the Cloud with Blue Mix pass.  You have the proof points. Internally, what's it been like? It's been pretty much game on internally. It's been unbelievable. And what have you guys nailed down this year? And share with us to answer that question. Well, I think the key thing we find is, you know, from the chairman down, we're 100% committed on the Cloud right now. From the acquisition of software to the rollout of the data center, 40 data centers we're going to put this thing on. And just from where we were in February to where we are today, you know, we had an estimation that we would probably have 20,000 apps up and running on Blue Mix by the end of the year. 200,000 is what we've been into. We expanded that out to London. We've got it coming into AP. The amount of enterprises that have been excited around the dedicated piece has been unbelievable. The support from IBM and also the support from the community, the momentum behind the Cloud Foundry piece, that we've seen acceleration unlike anything we've ever seen. We have one of your customers in here. The Nigel who said, without Blue Mix, he wouldn't have finished the races, really impacted his business. I mean, this is like 150 miles an hour in the ocean. Okay. He's trying to get to 210. So Blue Mix is working. You're shipping code, you're shipping solutions, what's embedded in it. And I think what you're seeing is that, you know, it's bringing this, you know, I think other paths that had kind of opened up the opportunity to really do innovation and really do it at speed. And most enterprises had held back a little bit from that as well. But now with the IBM name behind it, plus the type of services that we're putting on top of Blue Mix, they see their favorite type of middleware starting to come. They see capability and enterprise grade software that they know and love. And now they're putting their toe in the water as well.  Yeah, this is not an R&D project. Blue Mix is out delivering value. It's not about the integration. I mean, to me, that's a key part of it, right? Because people don't wake up and say, oh, I'm going to get me some pass. Yeah, yeah. Solution, so. Well, it was funny. We had Jim Dieter's on stage with us this morning and Jim does the pure startups. And, you know, for a lot of the smaller companies that are doing pass for the first time, you know, it's naturally where you go. I'm going to run on the cloud. I'm going to have an environment that brings services to me as well. Our enterprise accounts, though, you know, they've got a large set of kind of crown jewels back behind the firewall as well. And they're waiting for somebody to say, how can I use those in the equation? You know, some of the cloud vendors say, well, just port it. Some of these environments, they've been running for years and decades. They're not going to undertake a port. But how do you bring that to the case? So one of the things we announced this week as well was a secure gateway. So let me kind of use my mainframe environment. Let me use my on-premise environment. Let me bridge that back out to the cloud. Brand new API management set of services as well that lets me better wrapper those and be able to integrate it. And then also kind of a federated catalog so I can actually use some services local where it makes sense. And I've got latency concerns, security concerns. But then I can use all these great public APIs with it at the same time. So we're getting a lot of novelty on how we're bringing the cloud down to where they are today plus giving them the option to reach out as well. So what's going on in the app? You've mentioned a number of applications, like hundreds of thousands. So talk, give us some sample. Oh, sure. How would you categorize them? How should we be thinking of them? Well, I think with the passes, I think most firms are finding that it's almost a programmer's renaissance right now. So for one, it's such an easy environment to get up and going. It's almost like you have unlimited data resources. You've got unlimited compute resources. And now you can play with middleware that you would have never had exposure to as well. So we see tremendous amount of exploration going on. So we got one partner working with us and they started working on how do we bring technology into a retail store experience to kind of augment what the customer deals with. So traditionally we're bringing plasmas in that could actually tell if you're male or female. And they were using it initially for like a bike store to see help me pick out what kind of bike you would use. We launched the Watson services and one of the things we have in Watson is we can analyze your past 100 Twitter feeds and come up with the five personality traits that you have. And so they played around with that and they got some cute feedback from it.  But then a large car company saw that and said, hey, maybe we could use that in the dealership. Individual walks in, gives you their Twitter handle. Maybe I could use that to help assign the salesperson to them to increase the sales in the dealership as well. No one had that on the radar screen but because the ease of use of playing with these services things are just popping up. Is that now a new product? Is that, was that productized? Is that just more of an anecdotal evolution? Well, the company that sells IQ, that's a reference of ours, you know, they've already have stood up the Watson services and they launched it at South by Southwest last year and now they're playing around with other opportunities. Well, we were talking to Docker earlier with this word stand up is a cloud term, right? Stand up some servers. And if this means not provisioning it, take weeks to provision. That's a cloud term. But that's now proliferating to social media, to business. Standing up fast is a cloud DNA. Well, you know, I spent five years at Rational and we were dealing with more traditional style of development. And you know, it was unfortunate but you know, it used to be look at old software products, 68% of them never saw the light of day. It wasn't because we had bad programmers but to do a project, you had to allocate the hardware. You had to allocate the middleware. Sometimes it took six months to lay out web sphere and MQ and whatever you put on top of it as well. Then you build the app, then you have to test it. Then you got to fight with the CIO to get on the production schedule and oh, they're upgrading SAP that year. You're off the table. When we might replace that with Cisco routers, that's about a 12 week assessment. Took all the budget immediately. So we're at a point now, we're seeing guys, programmers, it's like a candy store. They're now saying I can launch a basic application and I may do a version for East Coast. I may do another version for West Coast. I may do one for a subset region. They can now explore and try things that were just completely unthinkable. The creativity is on the table. Pretty much, that's what you're saying. Well, we've actually have stood up. We've got two of these blue mix garages up and going. I've got one in San Francisco and we opened up the second one in London as well. And we kind of have it as an innovation center. So customers can come in and we actually located these on startup campuses. So we're at Galvanize in San Francisco and at level 39 in London. So a lot of companies are saying, let's figure out how to build my first born on the web application. So they come in, we help them with design thinking. We help them with a consulting practice. Within four weeks, they've got that application up and running on blue mix and software. Now, while we based it in the startup communities, we thought our first clients were all going to be startups, which we've had good luck with them, but it's the enterprises.  So what are those guys doing? Are they writing greenfield apps? Are they deploying mobile apps? Are they sort of refreshing older parts of their portfolio, all of the above? It's a mix. I think many of them are, key thing on their list is they're trying to look at, one, their core businesses and where could they be disrupted? I had one that came to me, said, we better disrupt ourselves before we get disrupted by a startup. Because in all these campuses, you've got hundreds of guys that are just figuring out how to take a pot shot at these big enterprises. It's like city yesterday saying people need banking, they don't need banks. No, I need banking, I don't need break and mortar. So some of them are saying, let's look at our core businesses and see how we can augment that. How can we get better reach into our client base? We had one client who brought us the problem that they wanted to sell insurance to a category user that they had never touched. It was the guy that never did financial planning, never saved money for college, but they had no way to reach him. So they used Bluemix to build almost a video game where he inputted just five basic financial goals. We put some great graphics around so it looked like a video game, et cetera. We really didn't think it was much of an app. The guy collected five data points. They were thrilled. This was five data points on a constituency group that they were blind to, completely in the dark. So just getting access to them, getting insights, extending existing applications, it's wide open. Let's talk about the big picture for customers, right? Because there's a lot of noise in the market right now. The big variety of reasons, exploding in value and some lanes are forming. We're seeing consolidation in the open stack play in the open stack market, for instance. Break it down, open stack, the past layers of variety of different flavors where Bluemix is playing and then I'll see Mobile First, everything else on top of the stack. Big data and whatnot, Tom Watson. Yeah, and I think we've learned a lot in the past year as well. When we first built Bluemix, one of the reasons we had developed it on Cloud Foundry is we wanted to leave the option open that should we put it on multiple infrastructures that we could easily use the portability of Foundry to be able to do that. And then kind of around the first half of the year, it was clear that this was going to be a deep pocket full stack play from top to bottom. And that's when we really started using on optimizing the full software stack up and down. I think the challenge for most public clouds, you're playing almost a three dimensional game here. So one is to get your global coverage as right as possible.  We're gonna go as many as possible. So we've got 40 in the works right now. We announced four new ones this week. And how we have those communicate, how easy it is to move data, how easy it is for enterprises to deal with data privacy and locality issues, et cetera. So that's going to be how quickly can you provide a worldwide support.  And I think what most firms are looking at is can you provide me a robust infrastructure that lets me do things public, do things in a more private fashion and then do things local for me as well. So things like OpenStack then gives you that consistent infrastructure. So software, I can go with a software infrastructure public, software infrastructure dedicated. When it's back on the client's machines, it's within their firewall itself. I've got to have some good rock solid base to do that on. OpenStack is the perfect choice. Remember the old OSI interconnect models? There you go. So is that what you mean by going deep that you're essentially forming, not like layers like that, but like similar stacks of private, hybrid, public, I mean. Right, you want to make sure at least enough common architecture so that what you build on that environment may have legs and you can actually do something else with it down the road. So that's what you mean by going deep? Yeah, so going deep. So being deep, being deep in functionality stack for the apps, global's more of an infrastructure play across the board. Okay, and that's for- That's pretty close, but case in point, if you look at it right now, I'll talk to a typical enterprise account and are you going to go cloud? And I'll all say, yep. How about public cloud? And they're like, nope. Or they'll say, in eight years, I plan to have 50 to 65% of my workloads on the public cloud. You're ready to do that today? I'm nervous. Nervous about security and nervous about multi-tenant and I'm nervous about the noisy neighbor. But how about if I give you a local instance today to let me start building and once we get you more comfortable with this model, you can actually take those components, move that application with no change to a dedicated environment. Sounds good to me. And maybe down the road, you want to take part of that, move it to a public environment. That sounds fabulous. So it's a GPS problem. They know where they are today. They kind of know where they want to go, but nobody's providing them the road network to get between point A and point B. You know, I'd argue that Amazon might say, hey, we're winning the enterprise. We just scored the CIA. We supply the government. We're going into the enterprise. The CIA was a little bit hauled back. I haven't heard many more of that as well. I'll see you guys out there. Part of their challenge is definitely, public is the way to go. But that's their messaging. They're saying, we could do both. Security's not a problem. They answered the security. So well, public love to them is a hammer and every opportunity is a nail. But it was a CIA deal is interesting. To me, it was a wake up call. You guys woke up before that, but IBM's a lot like Abe Lincoln, right? Seriously, it's a battleship, but it will turn. Abe Lincoln took forever to make decisions. He's honest, smart, but once he made a decision boy, right? Focused. That's who the IBM is, right? We were 100% behind him. Whether it was a wake up call, I'll give you points on that one, but we're fully behind this thing. Well, yeah, again, I think, I'm sure internally, you know, you know what's going on. Well listen, I think the challenge, I think a lot of these pure, pure cloud, pure public cloud guys, you know, we've been around, a few people say, you know, IBM's been a little bit slow to the game. I think the, what they don't realize is, you know, we've been doing enterprise grade development for decades. We've been doing enterprise middleware for decades. You've got a problem to us. IBM just does not blink. We've seen it all. Yeah, it's totally true.  We did the NASA program. We've done federal projects before. Yeah, it really becomes a product issue. It's like, okay, that's a focus. Customers want that. Yeah. Once that snail, it's an engineer, you have all the engineering, you have the software. And I think what you're going to find is some enterprises, you know, some of their environment that they would like to extend portions of it out will never be ported. You know, these systems are so tuned and they're so optimized and they're so audited and they're under so much regulatory control that keeping those closed, keeping those local is exactly where they need to be. But to be able to extend those out and be able to use those in new ways in fashion, I think IBM has a very unique opportunity. Yes, and I think though, I think that for a long time, companies like IBM and others, you weren't alone in the enterprise, use that as a wet blanket to say, okay, we can just sort of do our private cloud thing. And then, boom, you had to internally make the decision to take all those capabilities and assets you had and cloudify them. You made some acquisitions, which were key. And then, boom, now it's a whole different landscape. So we're getting the hook here, but I do want to get a couple of last questions in quickly. Comment on, everyone big wants to be small, small wants to be big, that's the thing we've heard, you mentioned it. But entrepreneurship is thriving, right? You've been talking about it, the show here. Entrepreneurship startups, there's a huge opportunity for collaboration. You guys are working with startups in the cloud, you're also IBM. But what's your advice? What's your directional view of the startup landscape and the enterprise and opportunities for entrepreneurship? You know, I think we're going to see models there that just would have been unimagined prior. Like you said, you're seeing, you know, you're seeing the cats and dogs lying down together here. You're seeing the enterprises not only being attracted to the startups, but how do they start to include them in the ecosystem as well? We had Citi on stage, as you said, yesterday as well. We're working with them to sponsor a national hackathon where they open up APIs, we bring Bluemix to the table with all of our services, we're getting other sponsors to bring their APIs, and who are they opening it up to? Not to city developers, but to the startup community. So they would love to start up some Silicon Valley and Tel Aviv, et cetera, to see what can they now build with this wide swath? So do you see the success of like Docker and open source with developers, which is obviously collaborative. Now moving over to the business, technical business model side of it, with startups, because if the new way to work or the new way to think is to be collaborative and in the open with big data, everything's being watched out in the open, is there a new model of startup collaboration with the big companies that are out there? In a way, it's kind of like that model of open source. You're definitely gonna, it's all going to be community-based. You know, the more guys you have around it, the more numerous companies, the more innovation, the more longstanding. You know, a lot of the guys on the West Coast, I'm open source. I put my code out in the open, but unless you have multiple people contributing to it, it's not going to be a standard that lives longer term. So I think companies are seeing that as well. If they want to be viable long-term, can they be attracted to a wider community of technology providers and also bringing their ideas to the table as well? That's how you differentiate. That's how you keep from being disrupted. A new way to do business, new business models. Steve, thanks so much for coming. You've been over a little bit. I want to get that entrepreneurial angle in. I know it's near and dear to your heart, as well as the cloud here at IBM. We are theCUBE broadcasting live in Las Vegas. I'm John Furrier, Dave Vellante. We'll be right back after the short break. It was my first time on theCUBE. It was fun. Do it again. Do it again. Yeah, I think what I've come to find, letting my second time on theCUBE is, I mean, it's just such a real-time, high-energy experience. It's very good because there's no filtering of questions. I was not prepared, other than saying go and get up there. So it was quite good, it was quite an experience. I think what you're going to get is the real answer. You know, it's not scripted. It's authentic. It really allows you to communicate quickly your point of view about who knows what they're going to ask you. So I thought it was great. I didn't know what the questions were ahead of time. They asked some good ones. I think some ones that, if it was an unbiased thing, a biased thing, I don't think we would have gotten it. And I think that's what people want. They want those questions. And it's hard for us sometimes to ask them unbiased because you're biased by nature. So it's great to get those questions and be able to answer them. Like I said, I love the energy. I mean, these guys ask good questions and obviously not only them, it's the Twitter feeds coming in from questions from the audience. Sometimes it's a question nobody wants to ask, but they're thinking, so it's good. It's a great way to sort of, you know, answer those tough questions. It gave me an opportunity to hopefully share with the people watching, you know, some of why we're doing what we're doing. So what's going on today? Message. Email. Calendar updates. Most of us admit to being overwhelmed by information at work. That's why IBM created Verse. It uses powerful analytics to uncover hidden patterns in your email, calendars and social feeds. It continuously learns how you work and helps you prioritize the people and projects you need to focus on. There's a new way to work and it's made with IBM. Hi, I'm George Matthew, president, CEO of Altrix and you're watching theCUBE. I'm Dimitri Zemin. I'm the CTO and co-founder of Stackstorm and you're watching theCUBE. 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Hi, I'm Andrew Kreitzer, Business Operations Manager at LinkedIn and you're watching theCUBE. I'm Chris Selland, VP of Business Development for HP Big Data and you're watching theCUBE. Hi, I'm Stacey Slaughter, Senior Vice President of Communications for the Giants. I'm in the garden at AT&T Park and you're watching theCUBE. I'm Thomas Minnick, Business Intelligence Consultant within our works and you're watching theCUBE. Hi, my name is David Tishkart, Director of Partner Marketing at Cloudera and you're watching theCUBE. Hi, I'm Jim Yu, Founder and CEO of Bright Edge and you're watching theCUBE. You can bring back a lot of things from a trip around the world, but you can't always bring back customer data because many customers don't like it when their data moves around. If you're gonna do business globally, you need a cloud that can keep your data where it needs to be. Today, there's a new way to work and it's made with IBM. Live from Las Vegas, Nevada, it's theCUBE at IBM Interconnect 2015. Brought to you by headline sponsor IBM. Okay, welcome back everyone. We are live in Las Vegas. This is theCUBE, our flagship program. We go out to the event and extract the similar noise. It's looking at angles, proud to be here for a special event with IBM Interconnect in the Go Social Lounge where all the action's happening. Go to interconnectgo.com for the new social experience site powered by CrowdChat, CrowdChat platform, the VIP influencers, a great way to experience the show if you're not here live. Our next guest is Nancy Pearson, CMO of IBM Club, welcome back to theCUBE. Great to see you. Great to see you guys.  And the cloud is super hot right now. It is so hot right now. This is dominating the show pretty much. I mean, there's a lot of stuff going on, but this is a cloud show. It's all about under the hood and application speed, standing up stuff. What's your take? How do you feel? Are you happy with things here, customer reaction? I feel terrific about this event. I really do. And as you know, this is the first one of this size. So we compressed three of IBM's previous conferences into one major conference and we made it the cloud and mobile conference. So yes, it's all about cloud. We've got some mobile in there as well, but we're really actually covering the entire portfolio here. So it's been exciting and we actually got 45% of the attendees are new to any IBM conference. So that's kind of a really important number and we've seen some really positive feedback from our clients and from our business partners. They're saying that's the most exciting part about this event to them because they're having some new conversations. So that was one of our objectives. The other was to combine the content, really focus on cloud, make some major announcements around our hybrid cloud, capabilities and our strategy. And then also profile clients. This is about client success. A lot of client success and key partnerships. So the data doesn't lie. Well, you know we're data driven. And so I'm looking at the IBM community of Interconnect, the three shows. Since you guys announced the three shows been running full monitoring on our listening engine. And over the past three months data, the top interest points are cloud, big data and IoT. And the other ones are IBM, IBM Centric. But the three top are cloud, big data and IoT. Do you agree, is that the right sentiment? I mean, IoT seems to be coming up in every conversation in applications, mobile, healthy cloud. It really is. And you know, when we talk about cloud, it's really impossible to talk about cloud without talking about big data analytics or IoT or mobile and even social. And in fact, we took a very different approach to this event from a general session perspective. We focused on client vignettes. And so we have highly produced client vignettes for every general session. So it's not an IBM or up there talking with a bunch of PowerPoint charts about technology. It's, we bring to life a customer scenario. And in many of these scenarios, they cover IoT plus mobile plus cloud in very meaningful ways, you know, in an integrated approach. And I think that's another interesting thing about the way we're doing this particular event differently is we've had clients kind of railroaded into, oh, you're going to go to Pulse because you're interested in systems management and asset management. You're going to go to Interconnect because you're interested in WebSphere and business process management. So bringing all of this content together, cloud is really permeated all of these areas. And then we get more clients because they understand it more from their perspective versus are going at it from an organization out perspective. Plus it's more integrated.  Right. So talk about your keynote a little bit. Yeah. So well, yesterday was general session kickoff and Robert LeBlanc did that with Airbus and Citi. I'm sure you probably went through. Citi was unbelievable. Citi was awesome. So cool. It was really great. Jerry did a great job and so did the city executive. So today this morning I did the keynote on business, cloud business applications. And we also- You made it to your keynote. I did make it to my keynote. It was questionable. And we had a couple of fits and starts. There were little technical difficulties, but I just got up on stage and delivered anyway. So- And the key message was there? Our key message there was we featured a lot about business applications and we featured the IBM cloud marketplace. You know, that's something that we announced last year. And now we have over 400 services in the cloud marketplace between IBM and third parties. And so we took a fun approach. You know, I gave an overview of what's happening in terms of digital transformation, reinventing your business processes, how you need to do that with new services, you know, your own capabilities as well as third party services and a strong development platform. But we did it with a vignette. So we had this story about the Stratus Cafe and we had Chef Jay Baer, who was the guy who was the commentator on the first day, come up, big chefs had a whole outfit. And he basically, you know, he took them through a startup cafe and what would happen in terms of you needing to, you know, merchandise your cafe, hire talent, do one-to-one marketing, all through the cloud marketplace and leveraging and demoing those services. People loved it. They thought it was really great. Yeah, we had, did you just pop up restaurant? Yeah, we did pop up restaurant, exactly. That's exactly what we did.  You know. You know, that was one of my ideas for the conference. I was hell bent on getting Shark Tank here. And I think it's going to be really fun because we took some of the key entrepreneurs, the finalists, and it's one of my favorite shows. We're kissing live on theCUBE. Oh, I love that show. SharkCube. SharkCube, yeah. Shark TankCube. That's right. You could do some rebranding here. I like that. Yeah, Dave's a shark. I'm more of a sheep, but. Thanks. Going back to the key theme of clouds, I mean, that's the same question. Are you having a pinch me moment like Steve asked the same question? It was like, you guys announced it a year ago. I mean, this is not even a year. I know. So we were kind of like, it's in beta. We don't know how it's going to go. Right? Remember that too? You know, we were talking about 2,500 and that was a stretch number at the time. I'm sure Steve updated you on the number. It's 250,000. Yeah, it's massive. So, and now, you know, what we're also saying, a very important part of the Bluemix momentum and market penetration is some of these key relationships like Bluemix and, you know, Capgemini, CFC, some of the new announcements that we've made here of tech Mahandra. So large system integrators that are really integrating and standardizing on Bluemix. That's the kind of momentum a year later that's pretty significant because those are large enterprises. And certainly we have a lot of individual developers on the platform as well. Well, I think the big shift that we've noticed, Nancy, is that previously, a couple of years ago, it was sort of everybody wants hybrid. There's a lot of concerns about the public cloud, the people are nervous, blah, blah, blah. But we don't have a solution. Now, all of a sudden, you really, by the way, we were saying before it was true, but now you've got a solution. And so what's the customer reaction been to that? The customer reaction has been very positive. You know, whether it's our hybrid cloud announcements around visibility and control and security, or we made a number of developer productivity announcements, I'm sure Steve talked to you about Bluemix local, but in addition, the secure gateway capabilities and API harmony. If you think about this, we're making it easier for developers to develop that innovative app and do it in a way that's secure and able to leverage the requirements around flexibility in terms of moving your data to the application, moving the application to the data, getting decision-making closer to the client through these applications. So the feedback has been very positive. I had dinner with Gartner last night. And, you know, we've got a number of things that are exciting and really help accelerate our client's success with cloud. So it's not about just bringing out ancillary, whiz-bang technology. It's about understanding where our clients are, listening to them, and making it easier for them. There's not a question about, am I going to go to cloud? Whether I need cloud technology. It's where are you and your journey and how can we help you accelerate it? Actually, talk about journey. You got a lot of great feedback on Twitter on your keynote startup, the journey of the startup, but one comment here I wanted to get your take on. Oh, besides, best shoes of InterConnect goes to Nancy Pearson. Oh, great. You got a treat there. I mean, when you're on stage, you look at it. Wait a minute. Are my shoes trending? That's all I want to know. The data, that's what the crowd's saying. The journey of the startup, the stage, discussing the transmission of the startup, that was good positive. The comment of disruptor or disrupted. What do you mean by that? What is that concept? You're either on the side of being the winner or loser, right? I mean. It's a decision that we're saying the audience really needs to make that decision. So, if you look at the nexus of forces and the advent of cloud, mobile, social, big data and analytics, you have other businesses like the non-traditional businesses like Fitbit and Uber coming into the market. They're leapfrogging technology, the technology legacy challenges of large enterprise, but they're also innovating on these applications that can disrupt your business. And it's not technology disruptor either. It's a business model. Yeah, disruptor. It's a business model disruptor because they're breaking the class. Enabled by technology. Enabled by technology. Well then they got to go back and get the tech because once they break through, they got critical mass. Right. This is the new business model, the new way to work. That's the new way to work, exactly. The new way to start up. Yeah. So I told them the story this morning of, I was with a large aeronautics or aerospace customer that we all have been flying on their airplanes. And their client rev asked me to come in and talk to them about cloud. So, I was telling them about how clouds are designed about innovation. And they're like, well, we're trying to figure out what applications we should move in. And I said, it's not, you can't just think of it that way. That's a very infrastructure data center oriented way of looking at it. You need to look at it as to how can you leverage cloud technology to basically increase new revenue streams around your core competency. And they said, aren't you worried about competition? Because the airline industry is very competitive. And they said, well, not really. We have this great app and we're using this great app. And I said, well, are you thinking about how to create kind of augmented solutions or services around the core competency of airline travel? And I said, an example would be if you looked at something like Uber, in New York City, Uber not only has provided transportation in a totally different way and in an expedient way, but they also did some testing around porting nurses to people's houses to do flu shots during that spike in that time of the year. It's not within their core competency. Well, it is because their core competency is transportation, but they're including other capabilities and experimenting on other delivery methods, leveraging their infrastructure. So I said to the airline, you could be creating services around a car service. So when people get off the plane, it's your car service. You can be coordinating multiple services that are adjacencies to airline travel. And then people will flock to you because there's one place to get through one application. I can get my car, I can get my airline tickets, but it's your service, not some travelosity who's doing it and disrupting you. Well, this is the interesting thing is you can, you're now seeing organizations traverse horizontally across different industries. These adjacencies we're talking about are enabled by technology, clouds sort of the substrate. Data is one of those transport mechanisms. Social information is one of them. You're seeing companies, Apple gets into financial services, Bitcoin, Amazon's getting into entertainment.  Well, the barriers to entry in terms of expanding horizontally are much lower with cloud and big data and analytics and social because you're transforming your business process. So it's interesting because everybody looks for disruption and technology waves and says, oh yeah, this next wave is going to kill all the old guys. That's not happening. What happens is the old guys actually have a ton of cash, they got creamed before and those guys who didn't go out of business realized that the people at the helm realized, well, we can do this too. Right, right. So either be disrupted by somebody new coming in and taking your core competency and doing it better. That's number one. Or you innovate internally and disrupt. Disrupt your industry. So what can clients learn from IBM? Because you guys are one of the largest, oldest companies in the world. You are both now, you've got a $25 billion business which is this disruptor business. You've got almost a $75 billion business that people are trying to disrupt. So you're in the middle of that and you're navigating it. We are and we're very upfront and back to my keynote. I was very upfront with the audience saying, we're going for this digital transformation as well. We're changing our business model. We're introducing the cloud marketplace. And yes, it's only a year old and there's, we know we need to do more with that but it's opening up a channel. That's a consumption strategy. People want to consume that way. Why wouldn't you go into business? That's right. They want to self discover. They, 70% of clients make decisions before they ever even contact you in your business. And where are they making those decisions? They're making them online. They're doing the comparisons themselves. You might as well serve them a fertile environment like a laboratory or a library of capabilities. You guys are going for it. I got to say IBM, you guys are going for it. The way you do your social business outreach. I mean, you've always been great for theCUBE. Openness. Now with cloud, you got soft layer in there. You got some meat on the bone. Blue mix is taking off. There's a rising tide. We expanded soft layer around the world. And all the engineers are working on it. So I want to talk about two things. Internal action in terms of building value fast into the platform from all the resources around IBM. What's going on there? And how do you market against Amazon? They are winning the gold standard in public cloud. They're viewed as winning the integrated stack. But now blue mix, red S, you got node.  Not fast enough, but go faster. So I'm sure they're all like, we want to go faster. So how do you market against Amazon? Given now you got the soft layer, now you get the blue mix, you got open stack. And what's going on internally for the resources? Well, from a resource perspective, you know we created the cloud unit. So we pulled a lot of those development resources together now very much all focused in the same direction. So we're going to be able to go much faster this year. We've taken the power of IBM and put it right in the sweet spot of where Jenny wants us to focus, which is on cloud. And again, cloud brings in. So that's basically like, stop everyone says time out and then time out resources, bang. That's right. Each of them is faster. It's all cloud. Yeah, nice. And again, the marketing teams all came together. The development teams all came together. So there's no excuse, right? We've got to continue to go more quickly. Now your point about like, how do we market against Amazon? The reality is Amazon is an infrastructure as a service. It's a public cloud, but it's only the infrastructure component. So when you talk about what we have, well, and you see, we see some blurring between infrastructure and platform. But so we've got software, we've got Bluemix and we've got a SaaS portfolio that's pretty robust and we're going to continue to invest there. Some clients don't want to take a piece over here, a piece over there and a piece over there. Because by the way, they're in large enterprise. They're already pretty fragmented as it is. And their biggest fear is visibility control over hybrid cloud environments. So they're either hugging their infrastructure behind the firewall, right? And very nervous about the public cloud, or they've chosen the public cloud and they realize they're expanding and they've got to tie back into legacy data or deal with the late data sovereignty problem. Yes, that makes a lot of sense. So our announcements, we're really focused on, we're able to bring visibility control to hybrid cloud environments, right? And we have capabilities at each of those layers. We're integrating those capabilities across the layers more.  And we're offering third-party services as well. Open architecture. Open architecture, open cloud. You guys are committed 100% to open architecture. That's right. So you've got infrastructure as a service plus, that's kind of Amazon. You got SaaS minus, which is kind of like Salesforce. All right, to me, you described it. The best solution is a layer stack of infrastructure service, platform as a service and software as a service that open integrated. That are integrated, exactly. Okay, so the IAS piece coming together nicely, the past piece very clearly coming together nicely. What about the SaaS? Can you talk about that a little bit? You've purchased so many SaaS companies. That's a hard thing to bring together. Well, that's what my keynote was about. It was really on the SaaS applications, the marketing applications specifically, workforce and talent application, and then a strategy application. And by the way, most of those SaaS services are leveraging Watson. Where else can that be? Nobody else has that technology. So it was amazing to show the audience how embedding Watson technology in whether you're sourcing for the best talent in the city that you're looking to start your pop-up shop in or you have a growing business and you're trying to deploy marketing by leveraging analytics that are pulled in through not only Watson, but also some of the other capabilities that we have, statistical capabilities that we have. So that's a big differentiator. Do we have that across everything? No, but we have that across some very focused areas that are growing quite rapidly. We're not a lot of companies have that. They don't have that. A handful, right? We are not even customer base. You're install base, they're from data centers. So you can't just say, oh, we're going to compute Amazon head on, but they're coming into the enterprise. So you got to kind of put the heat shield up a little bit and say, whoa, whoa, whoa, we got to address this concern of economics, new way to do business. Well, they made a lot of noise two years ago. Amazon, I was saying, hey, we're coming to the enterprise. And I think they were somewhat naive. I think they were very naive about it. Well, it's not easy, right? It's the enterprise. We know that it's not easy. Trusty, it's good. I've seen startups go out of business thinking the enterprise is easy. So Amazon, again, then big startup. Internet of Things, why is that so hot? Big data, I can see in cloud and big data work well together because analytics feeds the apps, clouds the engine, Internet of Things, is that kind of just another word for mobile or edge of the network? I don't really see it that way. Mobile is about the mobile experience through a mobile app. Internet of Things is about integrating sensors and data structured on structured data through all kinds of devices, right? It could be your refrigerator. It could be from a car, right? It could be from TPS, from a boat. We had Bosch on yesterday, right? Right, you'll see the dishwasher. Yeah. Nigel was on. Silverhook, right? Yeah, that's such an exciting story. That's a great example, by the way, right? In terms of not being able to be able to demonstrate a whole sport and get people engaged, a lot of what we're talking about is about engagement. So their business, they wanted to engage and they wanted to share data and information across the human that was driving the boat as well as the support team behind the seats and the fans. We interviewed them in Cuba earlier, by the way. Did you? That's a great story. Great guys, too, dynamic. Great interview. So he's like, thanks for Bluemix. No, literally, Bluemix, Watson, Cloud, real-time. They couldn't do it before. They fundamentally couldn't do what they're doing now before without Bluemix. But that's about instrumentation. It is. On the boat, leveraging it in real-time to the Cloud, back with Bluemix. That's right. And presenting it in a way that can engage a massive audience that's, you know, could be two or three miles away. What's the big confusion on the internet of things? People, as it, some, you know, GE calls it industrial internet. That's got their flavor. Cisco calls it internet of everything or what? I think you're seeing just some of the same, the terminology's not the same, because I have seen the internet of things grow over the last year tremendously. And just in terms of people even talking about it. So I just think it's, you're at the earlier stages of it. It's the same way people talked about Cloud. It's the same way people talked about mobile. Now they're much more comfortable and understanding. The same way, right? Same thing. But so it's, I think it's more of a maturity thing in terms of people really understanding and getting it. It's the next wave. Exactly. But it's here. It's not coming someday soon. And it's a developer hook, too. I mean, developers are mobile. It's very much a developer hook. You know, how do you create those applications? Right? Okay, so what's next? What's the big focus this year for you guys? We asked this last year, and you just said we're going to do it best we can.  What's your marketing philosophy this year? But you got a lot going on, right? You got SoftLayer, you got Bluemix. You got the tsunami of growth with data and Cloud. Right. What's your plans? So clearly we're going to continue to build out SoftLayer and Bluemix and our hybrid cloud capabilities for visibility and control, integrating across those elements. Again, that's not a job that's done, right? The more we can integrate, the more beneficial value we'll be providing to our clients. And then in addition to that, some of these key partnerships. You saw us partner with SAP. You saw us partner with AT&T, with Microsoft. You know, we'll continue to have some key partnerships because they're bringing us into their industry or into their business on top of our cloud. So we'll continue to do that. And then there'll be some surprises, you know, we'll get into some things that really change the game. That's what I call. And what's the big thing that's going to come from this IBM focus of the cloud division and all these resources? Speed, and agility, and innovation. Awesome. Nancy Pearson, here inside theCUBE, we're looking forward to it. Obviously, you know, when IBM starts putting their engine together, they got a lot of resources. So we're looking forward to watching it, being part of it, covering it. This is theCUBE bringing you all the signal here at IBM Interconnect. I'm John Furrier, Dave Laugh. We'll be right back with our next guest after this short break. First time on theCUBE. It was fun. We did it again. We did it again. I think what I've come to find, I think my second time on theCUBE is, I mean, it's just such a real time, high energy experience. It's very good because there's no filtering of questions. I was not prepped, other than saying go and get up there. So it was quite good, it was part of the experience. I think what you're going to get is the real answer. You know, it's not scripted. It's authentic. It's, you know, really allows you to communicate quickly. You know, your point of view about who knows what they're going to ask you. So I thought it was great. I didn't know what the questions were ahead of time. They asked some good ones. I think some ones that if it was an unbiased thing, I mean a biased thing, I don't think we would have got it. And I think that's what people want. They want those questions. And it's hard for us sometimes to ask them unbiased because you're biased by nature. So it's great to get those questions. You'll be able to answer them. Like I said, I love the energy. I mean, these guys ask good questions. And obviously not only them, but the Twitter feeds coming in from questions from the audience. So sometimes it's a question nobody wants to ask, but they're thinking, so it's good. That's a great way to sort of, you know, answer those tough questions. It gave me an opportunity to hopefully share with the people watching, you know, some of why we're doing what we're doing. Next one, scene three. Open port 2201-7 on the firewall for customer DB access. Install version 2.3 of DB connector and ensure verbose flag is set in case of problems. Isn't the cloud supposed to make business easier? Get the one that can connect to the systems that you already have. Today, there's a new way to work and it's made with IBM. Hi, I'm Andrew Kreitzer, business operations manager at LinkedIn and you're watching the queue. I'm Chris Ellen, VP of business development for HP Big Data and you're watching the queue. Hi, I'm Stacey Slaughter, senior vice president of communications for the Giants. I'm in the garden at AT&T park and you're watching the queue. I'm Thomas Minnick, business intelligence consultant within our works and you're watching the queue. Hi, my name is David Tishkar, director of partner marketing at Clodera and you're watching the queue. Hi, I'm Jim Yu, founder and CEO of Bright Edge and you're watching the queue. So what's going on today? News alert, message, email, calendar updates. Most of us admit to being overwhelmed by informational work. That's why IBM created Verse. It uses powerful analytics to uncover hidden patterns in your email, calendars and social feeds. It continuously learns how you work and helps you prioritize the people and projects you need to focus on. There's a new way to work and it's made with IBM. Hi, I'm George Matthew, president and CEO of Altrix and you're watching the queue. I'm Dimitri Zemin, I'm the CTO and co-founder of StackStorm and you're watching the queue. Vice president of product strategy at QLogic, you're watching the queue. Hi, my name is Ben Jones, senior product manager of Tableau Public, Tableau Software and you're watching the queue. Hi, this is Francois from Tableau and you're watching the queue. This guy could take down your entire company. Stay with me. On Thursday, a hamster video goes online. On Friday, it goes viral. A network choking phenomenon. Why do you care? He's on the same cloud as your business. The more hits he gets, the slower your business may get. Do you wanna share your clouds with a hamster? Today, there's a new way to work and it's made with IBM. Hey, this is Brian Sarabian, director of digital media for the San Francisco Giants and you're watching the queue. Hi, I'm Dan Gordon, co-founder of Gordon Bearsh and you are watching the queue. I'm Lynn, senior analyst of technology business research at TV and you are watching the queue. I'm Dr. Randy Fagan, the chief administrative officer of the Texas Institute for Robotic Surgery at HCA and you're watching the queue. Location. Location. Location. Here's the location that matters the most. Here or here or here. It's wherever this is. To get customers to come here and stay here, you're gonna need an app that connects to all your systems so they can bank, shop, do what they need to do and you gotta do it fast before the competition does. It's tough out here. You better be on the right cloud. Today, there's a new way to work and it's made with IBM. Act one, scene three. Open port 22017 on the firewall for customer DB access. Install version 2.3 of DB connector and ensure the boast flag is set in case of problems. Isn't the cloud supposed to make business easier? Get the one that can connect to the systems that you already have. Today, there's a new way to work and it's made with IBM. You beat the number one seed. You just have to win 70% of your points at net and keep unforced errors under 10%. On the IBM cloud, the US Open analyzes 41 million data points from eight years of competition to uncover key insights. Data can help show you how to win, and that's not an old business you're in. Today, there's a new way to work and it's made with IBM. Live from Las Vegas, Nevada, it's theCUBE at IBM Interconnect 2015. Brought to you by headline sponsor IBM. Okay, we are back live inside theCUBE. This is SiliconANGLE's flagship program. We go out to the events, extract the scene from the noise. I'm John Furrier, the founder of SiliconANGLE. I'm showing my co-host Dave Vellante before I know Wikibon research. I'm next to get to Jeff Fry, CTO, SystemZ, platform with IBM. Welcome to theCUBE. Thank you. So SystemZ is the big event we covered in New York City at the Jazz Center, which is phenomenal. It's the mainframe, huge, I call it the God Box, but that's California term, I guess. It's powerful, it's a mainframe system, but no one calls high-performance computing mainframes anymore, they're just big machines that kick ass, basically. So what's under the hood? What is the mainframe evolution to this modern world? People still probably have mainframes out there, big banks and whatever. But right now it's about speed, I need in-memory, I got all this stuff going on, large data, tsunami data, what's the innovation? What's under the hood? Well, I think that a traditional value of the mainframe is the more work you put on it, the better it performs. It's a large, shared pool of resources. It's got the best, fastest single-thread processor speed in the industry, lots of memory. We focus on a balanced system design. So processor, memory, bandwidth, internal buses, IO, it all comes together to provide ultimate scale and performance. And with the Z13, we've taken another turn on that crank, right? With absolute best single-thread performance in the industry. I think what's interesting about this mainframe is that we really focused on compute performance. So, you know, the traditional- Give an example for the order of magnitude, like, okay, I get the single-threaded thing, that's great, but performance, what does that mean? Well, we have a 5.0 gigahertz single-thread core, which is probably almost double what most distributed platforms have in terms of single-thread performance. And while a lot of competitive server platforms have traded off single-thread performance for more cores or more parallelism scale out, we haven't given up on that. Everybody's hitting the laws of physics. And in terms of the rate at which you can improve performance in these single-threads, but we're pulling every trick we know out of the book to ensure that we deliver industry-led performance. Can you say you focused this time around on compute performance as opposed to IO? Well, I think there's a well-earned reputation for Z being a high-volume transaction processing engine, data-serving, traditional workloads. But I think there had been a view that if you want to do numeric-intensive or compute-intensive or statistically mathematically-intensive workloads, you run those somewhere else. And with the advent of our objective to get more predictive and prescriptive analytics to the platform, with this machine in particular, we focused on mathematical performance of the engines. So we introduced vector processing, single instruction, multiple data, lots of memory, multiple threads per core, and that all contributes to computing. I see what you're saying. So yeah, the main frame you don't think of is you're traditionally as your high-performance computing system. Should we start thinking about it as high-performance computing? You know, I think there are extremes in terms of high-performance computing, but it's fair to, I think, recognize that commercial traditional, even traditional, transaction processing is becoming more compute-intensive. The language runtimes are making more use of compute performance rather than just moving data around. So, and I think it's really part of the core strategy here to use tools like IBM's SPSS, right, modeling tools, which generate these statistical models, and those things are mathematically and computationally intense. So we got to make sure we run those, best of breed on the platform. Got a long history at IBM, we were talking off-camera. When you saw the virtualization trend occur. Yeah. What did that feel like to you? I mean, I'd say the virtualization. I mean, VMware, specifically. Yeah, I thought you might have been talking about 1967 when we invented it. Right, right, yeah. But that's what I mean. So did you just look at that and shake your head or say, boy, that was a missed opportunity or what's going through your mind about that? I think that, yeah, a little bit. I mean, we, you had mentioned, we were talking a little bit off-camera, Z tends to be kind of the workhorse that just, it kind of works in the back room and it doesn't break, so it doesn't get a lot of attention. And I think there are some that just aren't completely aware, completely up to speed on the technologies that have been in this platform for quite some time. Now the guys at VMware have done a fantastic job of taking the x86 environment and virtualizing it. We still have, in my opinion, best-of-breed server virtualization. The benefit that we have is that it's in the hardware. That level of integration is the way we get near native performance out of our engines, even when they're virtualized and highly virtualized. I think the thing with virtualization that we need to be focusing on now is not just whether or not the processors are effectively utilized or how much work you can consolidate on the platform because that's a strength at Z. We can take 10, 20 cores worth of x86 and run it on a single engine on Z. And that's been a strength of our virtualization. But I think now with cloud and with all this dynamic provisioning and software-defined environments, I think the key to virtualization is in the management. So to have a really good, effective, standardized way to do virtualization management is really the key. And so when you talk about relative to x86, you've got an advantage because it's in the hardware and firmware. That's performance and utilization, in fact. Your virtualization tax is not as great. It's really minimal. It's de minimis. Yeah, like I said, we run near native speed. And VMware, you're right, has done a very good job. But I wanted to ask your opinion on something. So in 2009, I listened to Paul Moritz. He was at an investor financial analyst meeting. And he said, we are building a software mainframe. And I was taking notes and I went, that's interesting. Now they don't use that term anymore. They're marketing people. VMware's going to stop saying software mainframe. It's not, we don't want to market it that way. But what he meant was, it's all software in the world. That's the beginning of a Ritz. And he understands technology. So that really caught my attention. And I said, wow, okay, that's never goes down. Did you see that global Sysplex? I thought about that. It runs any workload, any app, highly virtualized. Has VMware in your opinion built a software mainframe? No. Tell me why. Well, I think the part of what makes a mainframe a mainframe is the economies of scale. As I said earlier, the thing actually runs better when you put more work on it. So when other competitive systems can drive utilizations to 80, 90, even 100% with consistent response times across all of the workloads, then maybe they'll have some of the mainframe characteristics. I think what he was referring to, which I happen to agree with, is this notion of software-defined environments. I mean, I think the point I made earlier, virtualization isn't just about having fast or utilized hardware anymore. It's about using virtual resources as the foundation for all of your operational environment. When you virtualize a system, it's dynamic. It can be programmed. You can grow it. You can shrink it. You can dynamically instantiate it. You can make it smarter. And these are the things. That's the holy grail. Yeah, this is what software brings. So if we can make hardware look more like software, right? Server storage and network. Holy grail. Holy grail. Holy grail. So I want to get your perspective on this. It did. We've talked all the time on theCUBE. The software mainframe by Maritz with great vision. 2010. Great vision. What happened next? It was like the... It stalled. No, it stalled. It was a Picasso that he painted. The Mona Lisa of the tech. Okay, beautiful. The problem was the market wasn't ready for you. All the stuff going on the stack, then they go to Pivotal. So they bring everything over to Pivotal. The couple. Nice little concept. But they're still working on the virtualization piece on the network layer. So there's still work to be done. So I think it's storage, by the way. Yeah. Right? I think the moonshot is software mainframe. And they're just not there yet. The industry. Yeah. So you guys have it. But see what I'm saying. Utilization is not the battleground anymore. Certainly for you. But when you look at the real utilization of a VMware environment. Yeah. They talk 20, 30, maybe 40%. Then they talk way over 50. It's no way, not even close. David Floyer knows this stuff. Certainly sub 30%. Yeah. So for the balance of the industry, it is still a water market. I don't mean to suggest that's not important. What I'm suggesting is. For you. Next. What's next. And what's next is to make use of virtualization as the foundation for all operational control of the environment. But aren't you doing that today? Yeah. We do a lot of that today. But I think we have focused on the mainframe on the traditional core value proposition of our virtualization being utilization and performance and scale. You'll see us do even more than we do today in the way of optimizing underlying resources based on the needs of the workload. That's another strength of ours. Is that we can assign service levels to the work and then have the operating system and the underlying hardware and virtualization layers optimized to the business importance of the work. So what's your take on Docker? Docker has this model and we just heard Nancy Pierce about the cloud, new division, all the IBM resources coming together and they're probably going to just jam just run like the wind. Now, you bring a different perspective in technology with the mainframe and you've been working under the hood. Share with the audience. What's the modern stuff that you've done that makes it state of the art, state of the art. Missouri runs workloads with all that stuff. What is it? Does Linux involve the Java? Pease out some of the highlights, the new shiny part of the engine that you've added onto this. Yeah, well, with this particular announcement for the first time, we've focused on core engine performance, again, delivering 40% more capacity, lots more cores, 10 terabytes of memory on this machine.  Who does that help? Is it a big bank? Minutes matter, right? For some of these guys? Take, you know, with people wanting to put more data, more data in memory, right? If you give a terabyte of memory to DB2 running on this platform, right? And have it use that stuff for in memory, more in memory, you reduce IOs, you improve response time by 70% for those transactions. Right, and those are all core transactional and environments that are running, right? Those financial institutions, those banks, those insurance companies. That's hardcore users that you have on that, right? This is like big, and what's the alternative? Say the Z wasn't around. I had to go build out a distributed system, buy some boxes. Yeah, I mean, people, I think generally, you know, believe that in the absence of a mainframe, right, and the value proposition I think you get with the mainframe, that's all about scale out, right? You know?  The stakes are high. They said we've already bought three, not even looking at it. Site unseen. Site unseen, we got the beta, we're just like, and I go, so you're writing a blank check, is it R&D? It's cool, you got a good R&D, no, no, no, no, no. He said minutes matter, hundreds of millions of dollars matter on a minute window, minutes window. Is it anything you can squeeze performance? Well, it's not just that, it's availability, right? I mean, the ability to make sure that you have a platform if it's running core critical business that's always there, always on all the time, right? It's not going to provide resiliency or availability problems. That's key to a lot of our customers. Accessibility too is important. Accessibility. Yeah, but Z13's not changing my application availability, is it? No, well, improving it. I mean, we continue, like, yes, the technical corp of this is that, take our IO subsystem, right? Every release, including this machine, we make the subsystems that drive IO smarter and more autonomic, right? So we have hardware that can sense congestion in the fabric, congestion in the network, can route around failures, all transparently, right? Multi-padding that does transparent routing around congestion and failure with no impact to the application whatsoever, right? This is what we focus on. I see, okay, yeah, certainly you can measure that as application availability. I want to talk more about IO. You said you focused on compute performance. Yeah. Innovations in IO goes through the balance system is the key. Yeah. I remember when I was a young pup in this business, I lived inside of the systems and technology guides. I would just pour through that stuff. And I remember when IBM announced MBSXA, expanded storage, I said, wow, if IBM could persist that memory extension, it would be totally be a game changer. And we were a few decades ahead of our time, I guess, in terms of understanding what technology couldn't do. But now Flash comes into play, and you're starting to see the pendulum swing back that persistence at near memory speeds. So can you talk about Flash and where it fits? Yeah, I mean, we got a couple, there's a couple places we can talk about Flash, right? The traditional thought on Flash is, you build storage with, you build storage Flash in our storage subsystems. And of course, the latency and the performance is extraordinary, right? And so we're even looking at the possibility of synchronous I.O. and really exploiting the response times and the latency improvements that Flash can give you in the storage devices themselves. But the other emphasis for Z is internal Flash. We actually have the ability to put 6.4 terabytes worth of internal Flash in the system. And we use that for internal purposes, right? So in a traditional ZOS system now, you can completely eliminate all of the paging, right? Virtual memory paging to external disk, right? By using internal Flash. That gives performance advantage, it gives availability advantage, right? It's huge. So given the slow nature of spinning disk, you mentioned paging, how much emphasis of prior to Flash did you actually put on paging algorithms? Again, given the latency, and do you have to sort of rethink paging now with that consistent resource? Like I said, I mean, in the last generation machine is where we introduced this and one of the primary use cases was paging, right? And so the performance you get out of that internal Flash and the availability is extraordinary. But now what about when I'm running Linux? It's coming. Because I would think that that Linux open source industry didn't even worry about paging for a long time. I mean, I think there's paging of the guests, right? And then there's paging and memory over commitment and optimizations you can make on the virtual machines themselves, right? So that's our next step, right? Is to make use and really exploit internal Flash, right? For the hypervisor itself. It's one of the big benefits to scaling up a virtual environment is effective memory management, working set management, right? Over commitment of memory So essentially bypassing spinning disk and as well as the storage protocol? That's correct and it's all internal. And so it's essentially a memory extension. Yeah. So the atomic rights. That's the way we view it. That's the way we view it is a natural kind of high performance extension in the memory hierarchy. And it's an atomic right into that memory extension? Yeah. And you're doing that today? Yeah, we're doing that today on the last generation of machine EC12. We introduced the Flash for ZOS. It was a ZOS only environment. And are apps being rewritten to take advantage of that? No, no apps. Or new apps? Yeah, you know, a lot of what we do in the underlying middleware operating system hardware, I think another benefit to the mainframe is that we introduce this technology and wherever possible exploit it transparently to the application, right? So it's not that some of these capabilities aren't made available to the application, but in the real leverage point is all of a sudden, your operating system, your DB2, your web sphere, that stuff just runs faster and better, right? With no change to the app. We did that with networking, where we introduced, you know, you mentioned high performance computing before.  So we've introduced that now on standard converged ethernet, completely transparent to the application. So now any applications that are driving JDBC access with the DB2, for example, standard socket IP transparent to the app, getting huge performance gains because we slide this stuff underneath it and it's all transparent. All right, Jeff, we're getting the hook here. We got the keynotes going on. Thanks for coming. I think you really appreciate it. Bottom line for the folks out there, what the system Z platform all about. Bottom line and a buffer sticker for what Z is about these days. Yeah, I think that the positioning here is with Linux, right? With the advances in the hardware, it's focused on not only providing the traditional value proposition for the traditional workloads, but with Linux, with standardization, with best of read virtualization, with the openness and the standardization to plug into standard cloud environments, right? You take all of that value of economy scale, it's a great cloud platform, bringing analytics to the platform with the compute intensive stuff, right? Very important for us. 80% security is solid. We've got advances in our crypto stuff again in this. The crypto is a big deal, I think. In this machine. That's a big deal, right? Two X performance over the last two years. Inter-memory analytics. Big memory, right? All right, there it is. It's the big irons, the God box. It's all knowing it's more of the more work you give it the harder it pushes and the better performance, love that line. This is theCUBE, same here. The more interviews we do, the better we get. Sure, love it. We're bringing it out to you with the event coverage here and I'd be able to connect live in the last few days. We'll be right back with this short break. The first time on theCUBE was fun. We did it again. We did it again. I think what I've come to find, letting my second time on theCUBE is, I mean, it's just such a real time, high energy experience. It's very good because there's no filtering of questions. I was not prepped, other than saying, go and get up there. So it was quite good, it was hard on the experience. I think what you're gonna get is the real answer. You know, it's not scripted, it's authentic. It's, you know, really allows you to communicate quickly.  So I thought it was great. I mean, I didn't know what the questions were ahead of time. They asked some good ones. I think some ones that if it was an unbiased thing, I mean, a biased thing, I don't think we would have got. And I think that's what people want. They want those questions and it's hard for us sometimes to ask them unbiased because you're biased by nature. So it's great to get those questions and be able to answer them. Like I said, you know, I love the energy. I mean, these guys ask good questions and obviously not only them, it's the Twitter feeds coming in from questions from the audience. Sometimes it's a question nobody wants to ask, but they're thinking, so it's good. That's a great way to sort of, you know, answer those tough questions. It gave me an opportunity to hopefully share with the people watching, you know, some of why we're doing what we're doing. A lot of things from a trip around the world, but you can't always bring back customer data because many customers don't like it when their data moves around. If you're gonna do business globally, you need a cloud that can keep your data where it needs to be. Today there's a new way to work and it's made with IBM. Live from Las Vegas, Nevada, it's theCUBE at IBM Interconnect 2015. Brought to you by headline sponsor, IBM. Hey, welcome back everyone. We are live in Las Vegas. This is theCUBE, our flagship program. We go out to the event and extract the Sinclair noise. It's looking at angles. Proud to be here for a special event with IBM Interconnect in the Go Social Lounge where all the action's happening. Go to interconnectgo.com for the new social experience site powered by CrowdChat, CrowdChat platform, the VIP influencers. A great way to experience the show if you're not here live. Our next guest is Nancy Pearson. CMO of IBM Cloud, welcome back to theCUBE. Great to see you. Great to see you guys. Love chatting with you. You're dynamic, you're so awesome. Great to have you back and the cloud is super hot right now. It is so hot right now. This is dominating the show pretty much. I mean, there's a lot of stuff going on but this is a cloud show. It's all about under the hood and application speed, standing up stuff. What's your take? How do you feel? Are you happy with things here? Customer reaction? I feel terrific about this event. I really do. And as you know, this is the first one of the size. So we compressed three of IBM's previous conferences into one major conference and we made it the cloud and mobile conference. So yes, it's all about cloud. We've got some mobile in there as well but we're really actually covering the entire portfolio here. So it's been exciting and we actually got 45% of the attendees are new to any IBM conference. So that's kind of a really important number and we've seen some really positive feedback from our clients and from our business partners. They're saying that's the most exciting part about this event to them because they're having some new conversations. So that was one of our objectives. The other was to combine the content, really focus on cloud, make some major announcements around our hybrid cloud, capabilities and our strategy. And then also profile clients. This is about client success. A lot of client success and key partnerships. So the data doesn't lie, well you know we're data driven. And so I'm looking at the IBM community of interconnect, the three shows. Since you guys announced the three shows, we've been running full monitoring on our listening engine and over the past three months data, the top interest points are cloud, big data and IoT. And the other ones are IBM, IBM, obviously IBM centric but the three top are cloud, big data and IoT. Do you agree, is that the right sentiment? I mean IoT seems to be coming up in every conversation in applications, mobile, IoT cloud. It really is and when we talk about cloud it's really impossible to talk about cloud without talking about big data analytics or IoT or mobile and even social. And in fact we took a very different approach to this event from a general session perspective. We focused on client vignettes and so we have highly produced client vignettes for every general session. So it's not an IBM or up there talking with a bunch of PowerPoint charts about technology. It's, we bring to life a customer scenario and in many of these scenarios, they cover IoT plus mobile plus cloud in very meaningful ways, in an integrated approach. And I think that's another interesting thing about the way we're doing this particular event differently is we've had clients kind of railroaded into oh you're going to go to Pulse because you're interested in systems management and asset management. You're going to go to interconnect you're interested in web sphere and business process management. So bringing all of this content together cloud is really permeated all of these areas and then we get more clients because they understand it more from their perspective versus are going at it from an organization out perspective. Plus it's more integrated. So you're hearing the stories that are full end to end. Right. So talk about your keynote a little bit. Yeah, so well yesterday was general session kickoff and Robert LeBlanc did that with Airbus and Citi. I'm sure you probably went through. The city was unbelievable. The city was awesome. It was really great. Jerry did a great job and so did the city executive. So today this morning I did the keynote on business, cloud business applications. And we also- You made it to your keynote. I did make it to my keynote. It was questionable. And we had a couple of fits and starts. There were little technical difficulties but I just got up on stage and delivered anyway. And the key message was there. Our key message there was we featured a lot about business applications and we featured the IBM cloud marketplace. You know that's something that we announced last year. And now we have over 400 services in the cloud marketplace between IBM and third parties. And so we took a fun approach. I gave an overview of what's happening in terms of digital transformation, reinventing your business processes, how you need to do that with new services, your own capabilities as well as third party services and a strong development platform. But we did it with a vignette. So we had this story about the Stratus Cafe and we had Chef Jay Baer, who was the guy who was the commentator on the first day, come up, big chef's hat, a whole outfit. And he basically, he took them through a startup cafe and what would happen in terms of you needing to merchandise your cafe, hire talent, do one-to-one marketing all through the cloud marketplace and leveraging and demoing those services. People loved it. They thought it was really great. Did you just pop up restaurant? Yeah, just pop up restaurant idea, exactly. That's exactly what we did. Give you a little Shark Tank action. I'm sure it's coming in with their proposals. You know, that was one of my ideas for the conference. I was hell bent on getting Shark Tank here. And I think it's going to be really fun because we took some of the key entrepreneurs, the finalists, and it's one of my favorite shows. We're kissing live on theCUBE. Oh, I love that show. SharkCube. SharkCube, yeah. That's right. You could do some rebranding here. I like that. Yeah, there's a shark. I'm not more of a sheep, but thanks. Going back to the key theme of clouds. I mean, I'm going to ask the same question. Are you having a pinch me moment? Like Steve asked the same question. It was like, you guys announced it a year ago. I mean, this is not even a year. I know. So we were kind of like, it's in beta. We don't know how it's going to go. Remember that too? You know. You know, we were talking about 2,500 and that was a stretch number at the time. I'm sure Steve updated you on the number. It's 250,000. Yeah, yes, massive. So, and now, you know, what we're also saying, a very important part of the Bluemix momentum and market penetration is some of these key relationships like Bluemix and, you know, Capgemini, CFC, some of the new announcements that we've made here, tech Mahondra. So large system integrators that are really integrating and standardizing on Bluemix. That's the kind of momentum a year later that's pretty significant because those are large enterprises. And certainly we have a lot of individual developers on the platform as well. Well, I think the big shift that we've noticed, Nancy, is that previously, a couple years ago, it was sort of everybody wants hybrid. There's a lot of concerns about the public cloud, the people are nervous, blah, blah, blah. But we don't have a solution. Now, all of a sudden, you really, by the way, we're saying before it was true, now you've got a solution. And so what's the customer reaction been to that? The customer reaction has been very positive. You know, whether it's our hybrid cloud announcements around visibility and control and security. Or we made a number of developer productivity announcements. I'm sure Steve talked to you about Bluemix Local. But in addition, the secure gateway capabilities and API harmony. If you think about this, we're making it easier for developers to develop that innovative app and do it in a way that's secure and able to leverage the requirements around flexibility in terms of moving your data to the application, moving the application to the data, getting decision making closer to the client through these applications. So the feedback has been very positive. I had dinner with Gartner last night. And you know, we've got a number of things that are exciting and really help accelerate our client's success with cloud. So it's not about just bringing out ancillary, whiz-bang technology. It's about understanding where our clients are, listening to them and making it easier for them. There's not a question about, am I going to go to cloud? Whether I need cloud technology. It's where are you and your journey and how can we help you accelerate it? Actually, talk about your journey. You got a lot of great feedback on Twitter and your keynote startup, the journey of the startup. But one comment here I wanted to get your take on. Oh, besides best shoes of InterConnect goes to Nancy Pearson. Oh, great. You got a tweet there. When you're on stage, you're looking at it. Wait a minute, are my shoes trending? That's all I'm talking about. The day, that's what the crowd's saying. The journey of the startup, the stage, discussing the transmission of the startup, that was good positive. That the comment of disruptor or disrupted. What do you mean by that? What is that concept?  Well, it's a decision that we're saying the audience really needs to make that decision. So, if you look at the nexus of forces and the advent of cloud, mobile, social, big data and analytics, you have other businesses like the non-traditional businesses like Fitbit and Uber coming into the market. They're leapfrogging technology, the technology legacy challenges of large enterprise, but they're also innovating on these applications that can disrupt your business. And it's not technology disruptor either. It's a business model disruptor. It's a business model disruptor because they're breaking the glass. It's enabled by technology. It's enabled by technology. Well, then they got to go back and get the tech because once they break through, they got critical mass. Right. This is the new business model, the new way to work. That's the new way to work. Exactly. The new way to start up. Yeah, so I told them a story this morning of, I was with a large aeronautics or aerospace customer that we all had been flying on their airplanes. And their client rep asked me to come in and talk to them about cloud. So I was telling them about how cloud's about innovation and they're like, well, we're trying to figure out what applications we should move. And I said, it's not, you can't just think of it that way. That's a very infrastructure data center oriented way of looking at it. You need to look at it as to how can you leverage cloud technology to basically increase new revenue streams around your core competency. And they said, aren't you worried about competition because the airline industry is very competitive. And they said, well, not really. We have this great app and we're using this great app. And I said, well, are you thinking about how to create kind of augmented solutions or services around the core competency of airline travel? And I said, an example would be if you looked at something like Uber in New York City, Uber not only has provided transportation in a totally different way and in an expedient way, but they also did some testing around porting nurses to people's houses to do flu shots during that spike in that time of the year. That's not within their core competency. Well, it is because their core competency is transportation, but they're including other capabilities and experimenting on other delivery methods, leveraging their infrastructure. So I said to the airline, you could be creating services around a car service. So when people get off the plane, it's your car service. You can be coordinating multiple services that are adjacencies to airline travel. And then people will flock to you because there's one place to get through one application. I can get my car, I can get my airline tickets, but it's your service, not some travelosity is doing it and disrupting you. Well, this is the interesting thing is you can, you're now seeing organizations traverse horizontally across different industries. These adjacencies that we're talking about enabled by technology, clouds sort of the substrate. Data is one of those transport mechanisms. Social information is one of them. You're seeing companies, Apple gets into financial services. It's going to Amazons, getting into entertainment.  Well, the barriers to entry in terms of expanding horizontally are much lower with cloud and big data and analytics and social because you're transforming your business process. So it's interesting because everybody looks for disruption in technology waves and says, oh yeah, this next wave is going to kill all the old guys. That's not happening. What happens is the old guys actually have a ton of cash. They got creamed before and those guys who didn't go out of business realized that the people at the helm realized, well, we can do this too. Right, right. So either be disrupted by somebody new coming in and taking your core competency and doing it better. That's number one. Or you innovate internally and disrupt. So it's interesting. Disrupt your industry. So what can clients learn from IBM? Because you guys are one of the largest, oldest companies in the world. You are both now, you've got a $25 billion business which is this disruptor business. Right. You've got almost a $75 billion business that is people are trying to disrupt. So you're in the middle of that. Right. And you're navigating it. We are and we're very upfront and back to my keynote. I was very upfront with the audience saying, we're going through this digital transformation as well. We're changing our business model. We're introduced to the cloud marketplace. And yes, it's only a year old and we know we need to do more with that but it's opening up a channel. That's a consumption strategy. People want to consume that way. Why wouldn't you go into business all right? That's right. They want to self discover. 70% of clients make decisions before they ever even contact you in your business. And where are they making those decisions? They're making them online. They're doing the comparisons themselves. You might as well serve them a fertile environment like a laboratory or a library. You guys are going for it. I got to say, IBM, you guys are going for it. The way you do your social business outreach, you've always been great for the cube, openness. Now with cloud, you've got soft layer in there. You got some meat on the bone. Blue mix is taking off. There's a rising tide. And all the top engineering- Right, we expanded software. We've expanded software around the world. And all the engineers are working on it. So I want to talk about two things. Internal action in terms of building value fast into the platform from all the resources around IBM, what's going on there and how do you market against Amazon? They are winning the gold standard in public cloud. They're viewed as winning the integrated stack but now blue mix, red-ish, you got node.  Not fast enough, but go faster. So I'm sure they're all like, hey, we want to go faster. So how do you market against Amazon? Given now you got the soft layer, now you get the blue mix, you got open stack. And what's going on internally for the resources? Well, from a resource perspective, you know we created the cloud unit. So we pulled a lot of those development resources together, now very much all focused in the same direction. So we're going to be able to go much faster this year. We've taken the power of IBM and put it right in the sweet spot of where Jenny wants us to focus, which is on cloud. And again, cloud brings in all the social data. So that's basically like, stop everyone says time out and then time out resources, bang. That's right. That's all cloud. It's all cloud. Yeah, nice. And again, the marketing teams all came together, the development teams all came together. So there's no excuse, right? We've got to continue to go more quickly. Now your point about like, how do we market against Amazon? The reality is Amazon is an infrastructure as a service. It's a public cloud, but it's only the infrastructure component. So when you talk about what we have, well, and you see, we see some blurring between infrastructure and platform. But so we've got software, we've got Bluemix and we've got a task portfolio that's pretty robust and we're going to continue to invest there. Some clients don't want to take a piece over here, a piece over there and a piece over there. Because by the way, they're in large enterprise. They're already pretty fragmented as it is. And their biggest fear is visibility control over hybrid cloud environments. So they're either hugging their infrastructure behind the firewall, right? And very nervous about the public cloud or they've chosen the public cloud and they realize they're expanding and they've got to tie back into legacy data or deal with the data sovereignty problem. I think that makes a lot of sense. Yes, that makes a lot of sense. So our announcements, we're really focused on, we're able to bring visibility control to hybrid cloud environments, right? And we have capabilities at each of those layers. We're integrating those capabilities across layers more.  And we're offering third-party services as well. Open architecture. Open architecture, open cloud. You guys are committed to open architecture. That's right. So you've got infrastructure as a service plus, that's kind of Amazon. You got SaaS minus, which is kind of like Salesforce. All right, to me, you described it. The best solution is a layer, stack of infrastructure as a service, platform as a service and software as a service that's open and integrated. That are integrated, exactly. Okay, so the IAS piece coming together nicely. The PAS piece very clearly coming together nicely. What about the SaaS? Can you talk about that a little bit? You've purchased so many SaaS companies. That's a hard thing to bring together. Well, that's what my keynote was about. It was really on the SaaS applications, the marketing applications specifically, workforce and talent application and then a strategy application. And by the way, most of those SaaS services are leveraging Watson. Where else can that be? Nobody else has that technology. So it was amazing to show the audience how embedding Watson technology in whether you're sourcing for the best talent in the city that you're looking to start your pop-up shop in or you have a growing business and you're trying to deploy marketing by leveraging analytics that are pulled in through not only Watson, but also some of the other capabilities that we have, statistical capabilities that we have. So that's a big differentiator. Now, do we have that across everything? No, but we have that across some very focused areas that are growing quite rapidly. Well, not a lot of companies have that. They don't have that. A handful, right? They don't have that. We have not even installed these customers base. You're installed base, they're from data centers. Yeah. So you can't just say, oh, we're going to compute Amazon head on, but they're coming into the en