Catch Duncan Hewett, VP – Software, IBM Asia Pacific in a conversation with Sanchit Vir Gogia, Chief Analyst & Group CEO, Greyhound Research on Greyhound Research’s knowledge sharing series ONTrigger.
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Sanchit Vir Gogia: A lot of my customers come back and these are IT decision makers, IT Managers they are sometimes confused, they know of Watson, they know of Bluemix but they are sometimes confused with the new branding of IBM.
Can you just clear some airs for everybody. What does Watson do? What does Bluemix do? Lot of people come back and say that we know Bluemix exists but what does it really do for me? I don’t understand that. Can you just clear some airs, please.
Duncan Hewett: So think of Bluemix is taking what we have is our core technology and moving it to a consumption based model so that someone may build an application to help change what they deliver to a client, what they deliver to an employee, how to modernize an application because the underlying code inside Bluemix is actually a core code. This is the stuff that we have provided to clients from the different parts of and others so that you bought in other pieces from other companies into that code base.
Let me make a simple one. Citibank actually run a program, Hackathon, to import innovation to build new mobile applications to provide a better experience to the clients. They have had three and a half thousand developments through hackthons and they are looking for people in one week to build on Bluemix and build me an application that you think will provide better service to my client. This is Citibank. The interesting part is the sponsor for that project is a VP of Marketing. So to different buyer who is coming for and looking for innovation, those applications come from a completely different ecosystem of partners.
SVG: Are these principle client opportunities different for different sorts of vertical in Asia Pacific?
DH: In what way?
SVG: So when I say that this is financial services in retail, the client opportunities going to be something else. The business case is going to be something else. Let’s say if you look at the top three, four, five verticals for you, what principle client opportunities are you going to solve with Bluemix?
DH: Interestingly for Bluemix it is one of those platforms. We have a 100,000 WebSphere applications in the world. So there are a lot of clients who build applications. There is an opportunity actually for them to add functions to those applications and end up with a hybrid application. Bluemix sitting on the cloud providing some of the functionality and then there are core services sitting in the environment and they may choose overtime to move their workload actually adding to the cloud or build that innovation or move it on premise. Actually we see workload moving back and forth. IT depends on what the workload is, where the datacentre reside, what the security is. Things like Bluemix that help you innovate much faster.
SVG: So the clients are really asking for that flexibility in workload movement.
DH: The speed, the move of the workload, the ability to be able to create something, test it, use it, grow it and then the opportunity to move it back in house
SVG: I am sure all of this change in IBM is also impacting sales people because they are sought of trained to sell in a specific way, approach the client in a very traditional way, maybe. Right? How are you sought of re skilling your sales people?
DH: Actually it is not just the sales people, this actually permeates all the way through our business. The clients are changing. If you are looking for solutions that help them deliver the outcome. They are looking for people with a skill and a subject matter of expertise that can help them because it is actually not only our people but it’s also our partners. We are seeing an emergence of different sorts of partners as well both system integrators and subject matter experts. But for our own people we have invested the last two years on actually training everyone around what changes our clients are going through.
So for sales people around, how do you engage? How do you give the clients clarity around what we can do and what we can’t do? How do we give our clients clarity around that these are components for your environment that I am best suited for and be comfortable that it is not always us for every component of the project?
SVG: Interesting. Let us talk a little about the fact that not only Asia is enterprise for you but it is also mid market and small businesses. It’s a very important part of your strategy. You have got now IBM Verse which is being delivered on a public cloud which sought of sweetly fits into the SMB strategy.
Just give me a sense of how does your SMB strategy for Asia Pacific look like? What are your expectations and more importantly what are you looking to fit in that SMB, what you expect will get you the numbers?
DH: The interesting part for us is that the client issues in SMB actually are the same as the issues in the big guys.
So it raises a significant opportunity to replicate the opportunities that we worked on to take that knowledge and skill and even as simple as working with financial planners. There are many financial planning firms and how do they provide advice to client that are in SMB. So that’s one part. How do you take that and bring it down through clients in different segments.
The other part is you look at the change in our portfolio. We have invested with SoftLayer to give people access to cloud capabilities in terms of capacity. Both us and our competitors are actually helping clients to get access to IT to solve problems in a more consumable manner and we have actually gone and done more work with ISVs who actually bring that subject matter expertise into SMB.
SVG: I’l come back to topic of ISVs because that is a topic very close to my heart but I want to talk about SoftLayer for a while because SoftLayer was a brilliant investment, you got a data centre that is great but it is sought of very heavy X86 environment. It doesn’t really do justice to let’s say a very highly mission critical workload which will be a typical risk environment.
How do you solve that problem? I know you just bought Blue Box which is very heavy openstack but again open stack wouldn’t really help you solve all the principle opportunities around main frame applications for example. How are you solving that piece of the puzzle?
DH: Interestingly, we saw in the project today. I can’t talk about the client name but that project is leveraging big insights, leveraging the information the client has actually all run in SoftLayer, with disaster recovery built in to the actual solution for the client because it’s actually time critical information, streaming the data, and then analyse that information. The reason it is on Softlayer is that it gives the client access to an incremental capacity as it grows, faster and more value to the business now rather than waiting, going through setting up your own IT, own service , the capital of those service over time. We are actually seeing business cases emerging, so how do you give me consumable capacity on a linear growth?
SVG: But how does it differentiate from AWS and Azure which are equally making the noise and splash in the market. Talking to a similar lingo if not the same so what is that one thing which you really think that takes the cake away for SoftLayer.
DH: I think both for Azure, AWS and SoftLayer. This is all good for customers. It is providing access to a more consumable IT environment that can help clients use IT value faster. So from that perspective I think it’s a good thing for our industry and it is good for our clients.
SVG: but I am sure there is one thing that helps you differentiate from your competition.
DH: I think there are couple of things that help for us. One is we have a very large outsourcing base. One of the things we are able to do is actually blend different work loads because those clients look to transform. One of the interesting trends that we are seeing in APAC is that the CFO putting pressure on IT, cost reductions over time, what you are doing on non-availability, what you are doing at the service levels, your real cost on number of people. Particularly salaries are going up, complexity is going up and there is not unlimited bucket of money. If you spend on operations you get less money to spend on innovations. So we are seeing Softlayer emerge into those clients, we blend it both ways.
SVG:. Even before we come to the ISV topic, I really want to understand how the IBM Apple relationship is panning out in Asia Pacific. It is a very significant relationship. Are you open to giving Apple gadgets via the global financing services at IBM? Is that something you actively discuss with clients?
DH: We are already doing. The interesting part is Apple’s part of a transformation in the industry. They have some fantastic technology personally, business wise, watching cloud expand rapidly the use of it because they are looking to transform particularly the way employs work or the way processes work in organizations where we get really excited. We are doing a series of enterprise projects on how to help employees transform the way they work both in airline, retail, and banking and leverage these tools. How do we accelerate that into an enterprise context? Now at the back end, you need to pull information from your single source, your client, data, you need GPS capability but how to enable using IPRs, the cost systems that are there today, pass these external sources of data whether its twitter, facebook and bring them together and deliver a solution.