>> Live, from San Francisco.
It's theCUBE.
Covering IBM Think 2019.
Brought to you by IBM.
>> Welcome back to theCUBE's coverage of IBM Think 2019.
Here in Moscone, we're talking so much multi clouds.
It's been raining all day, really windy.
To help us wrap up our third day,
what we call theCUBE Insights,
I have our co-CEO, Dave Vellante.
I'm Stu Miniman and happy to welcome back to the program.
It's been at least 15 times on the program,
I think our counter is breaking
as to how many you've been on,
Ray Wang, who is the founder, chairman and analyst
with Constellation Research,
also the host of dDsrupTV who was gracious enough
to have me on the podcast earlier this year, Ray.
>> Little reciprocity there, Stu.
>> Hey, we got to get you back on, this is awesome!
Day three is wrap-up and this is going to be fun.
>> Ray, as we say, theCUBE is everywhere,
except it's really a subset of what you
and the Constellation Research team do,
we see you all over the place
so thanks for taking time to join us.
Alright, so tell us what's going on in your world, Ray.
>> So what we're seeing here is actually really interesting,
we've got a set of data-driven business models
that are being lit up,
and you see IBM everywhere in that network.
And it's not about Cloud, it's not about AI,
it's not about security, it's not about Blockchain.
It's really about companies
are actually building these digital networks,
these business models,
and they're lighting them up.
IBM-Maersk, we saw things with insurance companies,
you see it with food trust, you see it with healthcare.
It's happening, and it's the top customers
that are doing this.
And so it's like we see a flicker of hope here at IBM
that they're turning around,
they're not just selling services,
they're not just selling software,
they're actually delivering these business models
to executives and companies,
and the early adopters are getting it.
>> Ray that was one of the questions we had,
is what's the theme of the show and--
>> There is no theme!
>> You're giving us the theme here of what it should be
because we talk digital, we talk cognitive,
we talk all these other big thought-y words
because we need to think while we're here, right?
>> We need to think, we need to think!
No, but the thing is this is a theme-less show,
people can't figure it out but the main thing is, look,
I've got a problem, this digital disruption is happening,
my business models are changing.
Help me be part of that shift, or I may go away!
And people realize that
and that's what they're starting to get,
and you see that in all the reference customers
the people that were on stage.
The science slams were also really great.
I don't know if you had a chance to catch those
but the science slams were kind of a flicker into research,
IBM research which is the heart of IBM, is coming up.
They're going from concept to commercialization
so much faster than they used to be,
used to be research would do a project people are like,
that's kind of cool, maybe I'll adopt it.
They're now saying hey, let's get this into the market,
let's get into academia, let's get early adopters on board.
>> So Ray, what do you make of the Red Hat deal?
What does it say about IBM's strategy?
Do you like the deal?
What does it say about the industry at large?
>> It's a great question.
The Red Hat deal to me was overpaid,
however, at 20x multiples, that's what PE firms are paying.
So every vendor is now competing with PE firms for assets.
Red Hat, at about 9x, 10x?
Makes a lot of sense, at 20x?
It's kind of like, okay, is this the Hail Mary
or is this the future strategy
or is this basically what the new company is?
I would have rather taken that money
and put it into venture funds
to continue what they're doing with these network models.
That would have been a better strategy to me
but Red Hat's a great company, you get a great team,
you get great COs you get great tooling.
>> So you would've rather seen tuck-ins
to actually build that network effect
that you've been alluding to.
Of course that would have taken longer
you know, wouldn't have solidified Ginni's legacy.
So, it's a big move, a big move on the chessboard.
>> Well the legacy's interesting,
last year the stock was down some 20-some percent,
it's up 20% since January
so we're going to see what happens, but it's a doubt component.
>> Well I've always said she inherited a bag of rocks
from Palmisano at the peak of 2012 and then
it got hit hard and she had to architect the transformation.
It took, I don't know, five years plus, so, you know,
she was dealt a tough hand, in my opinion.
>> She had a bad hand,
but we've had seven years to play this.
I think that's what the market's saying.
>> So it's on her, is what you're saying.
>> It's now on her.
She's got to turn this around, finish the legacy,
but you've got a great CEO in waiting with the Red Hat guy.
>> Jim Whitehurst you're saying?
>> Yeah, he's good
>> So she's what, Ginni is 60, 61?
Is that about right?
>> She's past the retirement age.
Normally IBM CEOs would have gone through.
>> 61 to 63 I think, is that range maybe,
hey, women live longer so maybe they live longer
as the CEO of IBM, I don't know.
>> She did get a bad hand,
but I think when you execute the strategy that money,
here's the tough part.
Investors are saying,
hey, we'd rather take your money,
back away from you through stock buybacks,
dividends and mergers and acquisitions,
and we don't trust you to do the innovation.
That's happening to every company,
including all of IBM's customers.
The problem is if you do that,
they're hedging against those companies too.
The same investors are taking 50, 100 million,
giving it to three kids in a start-up
anywhere in the world and saying,
hey, go disrupt these guys, so they're betting
against their own investments and hedging.
So that's the challenge she's up against.
>> We talked about in our open for the show here.
It's developers, though, that's the business model.
We saw IBM struggle
for years to get any real traction there,
there's little pockets there,
they've got great legacy in open source,
but Red Hat's got developers.
Ray, you go and see a lot of shows,
who's doing well with developers out there?
>> Microsoft redid their developer network
by going younger with GitHub,
whole bunch of other acquisitions,
this is a great developer buy in that percent.
But the other piece that we noticed here
was it's the partner developers that are coming in in force.
It's not your average developer.
I'm going to build a coding and do a mobile app,
it's people that work for large system integrators,
large networks, small midsize VARs,
those are where the developers are coming from
and now they have a reason, right?
Now they have a reason to build
and I think that's been a good turnaround.
>> How about Salesforce with the developer angle,
what's your radar say there?
>> It's not about the developer angle
on the Salesforce side,
what's interesting about the Salesforce side is Trailhead.
This is, like, learning management meets gamification
meets a whole LinkedIn training program in the back end.
This is the way to actually take out LinkedIn
without going after LinkedIn, by giving everyone a badge.
There's a couple of million people actually on this thing.
Think about this, all getting badges,
all training each other,
all doing customer support and experience, that's amazing!
They crowd-source customer experience
and learning right there.
And they're building a community
and they're building a movement.
That's the thing, Salesforce is about a movement.
>> Couple of others, SAP and Oracle,
give us your update there.
>> I think SAP's in the middle of trying
to figure out what they have to do
to make those investments.
We see a lot of partnerships with Microsoft and IBM
as they're doing the Cloud upgrades, that's an area.
The acquisition of Qualtrics is another great example, 20x.
20x is the number people are now paying for
for acquisitions and for assets on that end.
And Oracle's going to be interesting to watch,
post-Kurian to see how they come at it.
They have a lot of the assets,
they've got to put them together to get there,
and then we've got all these interesting things
like ServiceNow and Adobe on the other end.
Like, ServiceNow is like, great platform!
Awesome, people are building and extending
the Cloud in ServiceNow, but no leadership!
Right?
I mean, you've got a consumer CEO
trying to figure out enterprise,
a consumer CMO trying to figure out enterprise,
and they don't know if am I a platform or am I an app?
You've got to figure that out now!
People want to work with you!
>> Well it is a company in transition at the top, for sure.
>> But they can do nothing
and still make a ton of money on the way out.
>> And they've kicked butt since Donahoe came on,
I mean just from a performance standpoint, amazing.
>> Oh yeah, performance?
You can do nothing and I think it's still going to coast
but the thing is at some point it's going to come bite you,
you got to figure that out.
>> How do you think that Kurian
will fit at Google, what's your take there?
>> You know, early reactions on Kurian
at Google is good, right?
The developers are embracing him,
he understands what the problems are.
Let's be honest, I've said this many times
to you guys in private and also in public, you know.
It was a mess, it was a cluster before.
I mean, you had three years,
and you lost traction in the market, right?
And it's because you didn't get enterprise,
you couldn't figure out partners
and, I mean, you paid sales people on consumption!
Who does that?
You're a sales rep, you're like,
I'm not going to do this on consumption!
Makes no sense!
>> Ray, Kurian had been quoted that
no acquisition is off the table,
you know, they didn't buy GitHub, they didn't buy Red Hat,
do you see them making a 10, 20 million dollar acquisition
to get them into the enterprise space?
>> Billion. >> Yeah, sorry, 20 billion.
>> I think there's a lot that they go after.
I know there's rumors about ServiceNow,
there's a couple of other things.
I think the first acquisition,
if I were to make it would be Looker.
I mean I love that thing that's on there
and buy Snowflake too while you're at it.
But we'll see what they do.
I think the strategy is they've got to win back
the trust of enterprises.
People need to know, I'm buying your relationship,
I have a relationship,
I can count on you to be successful as opposed to,
hey, you know, you can get this feature for less
and if you do this on a sustained unit or,
I want to know I can trust you and build that relationship
and I think that's what they're going to focus on.
>> Well, come on, isn't Google's business still ads?
I mean, that's still where all their revenue is.
>> It is, but the other category is $10 billion.
That other category of devices and Cloud and all that?
That's still a big category
and that's where all the growth is.
I mean look at this, it's a full frontal assault
between Amazon and Google,
Amazon Alexa versus Google Home, right?
Amazon in ads, $10 billion in ads,
going after Google's ad business.
Amazon doing an AWS versus Google Cloud.
Google's under assault right now!
>> Give us the update on Constellation,
your conference is really taking off,
you've got great buzz in the industry,
and congratulations on getting that off the ground.
>> And the Tech for Good stuff, loved it.
>> Thank you.
We had great event, December 10th,
talking about the future of the Internet.
What it means in terms of, you know,
digital rights, human rights in a digital age,
was really that conference.
Our big flagship conference is November 4th through 7th,
it's at Half Moon Bay.
We get about 250 CXOs together,
about 100 vendors and tech folks that are visionaries
and bring them together, that's doing well,
and we do our healthcare summits.
We brought on a new analyst, David Chou.
David Chou, and if you've seen him before,
he's like one of the top analysts
for CIOs and chief data officers in the healthcare space,
he's at HIMSS right now.
>> He's awesome, we know him from Twitter.
He's been on, he's great.
>> Yeah, so we do healthcare summits twice a year
and that's been picking up,
some of the top thinkers in healthcare.
We bring them in to Las Vegas,
we do a brainstorming session, we work with them.
They think about ideas and then we meet again, so.
>> Alright, Ray, we want to give you the final word.
We're halfway through IBM Think,
what have you been thinking about this
and any final musings on the industry?
>> So I was very upset last year at how it was run.
And I think this has run much better than last year.
I think they did a good job.
February in San Francisco?
Never again, don't do that.
I know it's May next year, is when this event's going to be.
But I think the main thing
is IBM's got to do more events than once a year.
If you get enterprise marketing
you realize it's at the beginning of the year,
it's still sales kick-off and partners.
March?
March is like closing the quarter,
so you do an event in April or May,
and you do it in April or May
but you have multiple events that are more targeted.
This theme-less approach is not working.
Right, partners are a little confused
but they're here because it's once a year.
But more importantly, build that pipeline over the quarters,
don't just stop at a certain set of events,
and I think they'll get very successful if they do that.
>> Alright well, Ray, next time you come on the program,
can you please bring a little bit of energy?
We'll try to get you on early in the show
when you're not so worn down. >> I know.
>> Thanks as always.
>> Appreciate you coming back on, man.
>> Hey thanks, man, it's theCUBE!
I love being on this thing.. >> Always a pleasure.
>> Alright and, yeah, we always love helping you
extract the signal from the noise.
We're Dave Vellante, John Furrier, Lisa Martin.
I'm Stu Miniman.
Thanks for watching day three of theCUBE at IBM Think.
Join us tomorrow, thanks for watching.
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