IBM Storage GM Ed Walsh stopped by theCUBE at Think 2018 last week. Walsh talked about his customers’ needs for application modernization, agility and cloud-like capabilities regardless of data location. He picked up on themes initiated by Ginni Rometty, namely the ability of incumbents to become more nimble in a data-driven world. According to Rometty, 80% of the world’s data is not searchable by the public. This means there’s a boatload of information locked inside of organizations just waiting to be leveraged.
All week, we pointed out on theCUBE that while incumbents have many advantages, they also have built their organizatiofns around assets like physical plants and equipment. Even data companies such as those in financial services have challenges in that their data tends to be stove-piped and bespoke. Walsh contends that IBM can help these incumbents be more competitive because of IBM’s breadth of capabilities.
Storage Growing Again
Walsh has done a great job. IBM’s storage business, which had been in steady decline for years, has begun to show great progress. The company has shown four straight quarters of growth, despite competition from the public cloud. Importantly, IBM’s storage revenue doesn’t include customer spending on storage sold from the IBM public cloud as IBM counts those dollars in its $17B cloud revenue report. Better to show growth in the new stuff, right?
But the legacy portfolio is growing under Walsh’s leadership. Ironically, as we discussed with Walsh, IBM’s mainframe, Power (Cognitive Systems) and storage business all showed growth last quarter. IBM’s mainframe cycle appears to still have some legs and the company’s Power business touts some clear differentiation from Intel-based systems – namely bandwidth and speed of processing big data. The storage group has been accelerating product cycles and re-tooling its portfolio toward software-defined. It seems to be paying dividends as Walsh called this his “easiest turnaround” ever.
Bringing the Cloud Experience to your Data
Wikibon uses the concept of True Private Cloud to describe the idea of bringing the cloud operating model to wherever the data lives. Reasonable people can argue if the concept of TPC is really cloud, but the point I’ve always stressed is moving data is expensive, cumbersome and risky. Rather organizations want to substantially mimic public IaaS and bring the cloud experience on prem. While perhaps not completely self-service, as automated or as service rich as the public cloud, the concept of TPC is powerful because the experience has to be just “good enough.” And much better than before with legacy systems, in order to affect the operating model. Practitioners tell us that when they can truly change the operating model of their company, that’s when real savings start to hit.
Like many great leaders, Walsh credits his team as a key reason for success. I’ve known Ed for years and he has a strong reputation for growing and selling startups. When he joined as IBM’s storage GM, many people speculated that Ed was there to sell the division. The reasoning was Ginni was selling off parts of the business (e.g. x86 servers and Microelectronics), she had a bias toward software and services and Ed was an astute flipper of companies. But Walsh went on record early in this tenure at IBM stating he wasn’t there to sell the division – he was there to bring it back to prominence.
You see, later in his career, prior to joining IBM for the second time, Walsh went back to school at MIT Sloan and sharpened his management, strategy, finance and leadership skills. I’ve always believed he wanted a new challenge beyond running and selling startups. His formula seems to be working. Joe Tucci, the former Chairman and CEO of EMC was once asked what worries him and he said some thing to the effect of “IBM getting its act together.”
Looks like that’s happening…albeit a bit late to have an impact on Joe Tucci’s life.
You can hear a curated version of the exclusive interview I did with Ed at IBM Think 2018 in this cliplist below.