Microsoft, Bloomberg, David Westin discussed on Bloomberg Best


And Microsoft in offering computing in other software and services over the internet Bloomberg's David Westin spoke with IBM CEO Ginni Rometty and red hat CEO James Whitehurst about their company's merger did you know Mr with you right the top of your press release you say that this acquisition of red hat now you've completed will position IBM as a leader in hybrid cloud why is that important well I recalls important because it's important to our clients it is the destination for the cloud here Dave I think a lot of times people think of why everything's gonna move to one public cloud that is not what we see clients need want and are even targeted to it is this idea that I've got an existing a state like a house I'm gonna modernizes and I have five to fifteen public clouds already private clouds on pram it is a modern idea modernize an app I'm gonna put it where I want and then I have to manage and secure all that that is the destination in for the next generation we give them now a platform between red hat and IBM that runs on any public cloud that runs private that runs traditional and they can write an app once run anywhere secure and manage it that is a distinct and unique capability and that's what I mean by the hybrid cloud and that does make us the leader in that others talk it but they may have just a connection between their public cloud in their private cloud descend now allows us to be multi coloured everywhere what will is Jeannie says of Jim the the you got some other competitors out there in the cloud not hybrid cloud the cloud they're pretty darn big people like Amazon Google house is going to help you catch up to them or is that even the goal I'll start for the red hat component our goal is to be an even better partner with those clouds they're great partners our software runs on those clouds it runs on premise it runs on IBM's con it runs on on those clouds so they will continue to be great partners for us and as we are capable of moving many more workloads on to our software platform that's more workloads if those clouds can actually go in a dress and run so my conversations with the major clouds have been very very positive because he's they see this is an opportunity to get more workloads out a data center fronting on the clouds do you think of that that's really important reason to do this for us our clients want us to be able to take our platform in running anywhere so these are both partners and we cooperate or in competition on the other side Ginny you've ramped up the IBM percentage of your revenue from the cloud dramatically from selling four percent to twenty five percent a reason which are pretty time what's the ultimate goal world this get you to well look and now that is an ultimate goal as you think about the clients moving their work eighty percent are working to move to the hybrid cloud so this will continue on and again when we look at our revenues it transcends everything from our public cloud private cloud now these platforms it'll be on other clouds included in our services revenue so it isn't that it's a goal is to move with the same journey that our clients need to move with and what what what moving Jenny that what I'm doing with the overall size of the cloud expanding how much of this will just be riding with the cloud up and how much will be actually taking market share from other cloud providers yeah so look for IBM itself one way to think about this is two hundred basis points of revenue growth CAGR over a five year period and so this is what Jim just said a minute ago the import part to think of it is our own cloud the IBM IBM public cloud in our private cloud together should be the very best for mission critical work clients so as I said if I did fifteen clouds are ready so we also want to have our platform running everywhere else so as far as I'm concerned growth anywhere is going to be good for IBM yeah its interests I said this is all about helping our clients provide more value to their customers right so when client building new application new website a new mobile application the opportunities for us to participate weather is helping them build the application helping and integrate that with data having it run on our platform have it run on IBM's cloud any of those components are you know areas of incremental value that we can you know participate in as our customers create more value for their customers let's talk about how this will work together IBM red hat together because the second line you Presley's actually talked about IBM preserving red hat's independence Jim how important is that to the people who work at red hat right now that is really important not only just to the people who work at red hat to our commercial success we talk a lot that work capabilities driven company our capability around open source allows us to be involved in these communities and to have a durable success whether was Lennix OpenStack commodities in containers and that capabilities tied up in our culture and so it's not just our people one our culture that we which you give is true but it is integral to our success I think IBM recognizes that so this is about bringing our two cultures to work together to create unique value not to integrate to create one culture at the same time June if they truly are independent then how do you get too close to equaling five because normally they did independent organizations to pose to just because for yes no no no no eighty in so remember we've been at open source for twenty years along with red hat and so we understand when Jim says both it's both believe it's important for the right reasons so with Jim's company in red hat has done is bill that ecosystem and in open source with its unique Turman conditions and its ecosystem so on one hand we say preserve it that's what we're preserving the Oregon health and extend their reach in two hundred and seventy five countries on the other hand the synergy that IBM with our current products are those are going to work and you'll be seeing a lot of announcements this summer they will work the best on the red hat platform which is number one around the world so think of the word synergy which is different than in maintaining independence at the same time and so on one hand I take Jim's platform I not only go to new countries I then also go across all the other clouds the other side IBM runs the best on it in so we really at the end of the day you also have the only multi car platform out there so it is great synergy between the two and we do things to work better with each platform I think that's an important emphasized we're working to build the best hybrid cloud platform but nobody buys a hybrid cloud platform to look at it right you can do you buy it and to build applications or to move applications and so the capabilities that IBM brings whether it's their own software stack is one of the largest science vis their systems integration capabilities application development capability is how you actually put more clothes on that hybrid cloud platform and so coming together it allows us to certainly dramatically celery our business and I think dramatically salaried our clients businesses which are of course creates value throughout that that change is getting only ask a global question if I could if in fact to have this when you call chapter two of the cloud which is hybrid cloud with their core enterprise really putting more more their operations up on the cloud they have to live transfer across borders and yet we're getting some some some real resistance were saying certainly in the E. U. as you know there's a lawsuit pending right now in Ireland will the apple trade pros to China what kind of a threat could it be to the growth the clock not just for IBM red hat but for everyone if in fact you got comp id countries really sit down the law on transfer of data across borders yes look this is the most important reason one of the most important reasons people put in a hybrid cloud I mean think of that I think of the credit card companies we work with today if you're in a country like India that says no I want that date a localized here let's say I built my big credit card applications in two spots in the world I have to move an entire place there no if you build on our platform it's it's fine we can put it we can move the data to where it has to be this is really the critical point about a hybrid cloud apps and data can be where you need them to be and that could be for regulatory reasons cost reasons just the way the application functions and we give them that choice that is I mean it's a great question could but this is the solution to that issue so is that right Jim does that really facilitate for example China says we want all the data reside inside China we don't know what else up your combination of red hat and IBM will actually facilitate that so that in fact companies can just say we want the data all in China yes so absolutely so we are platform for instance is certified and works on Ali Ali cloud and so the ability seven written once and maybe I'm really trying to my own datacenter run on as you or I can now move that to Ali cloud without ever changing the code because we are delivering the same infrastructure that that application runs on whether it's on Amazon Google Ali Baba or in your own data center and that's what we're delivering that's the promised we're delivering the SL and Jimmy finally let me ask you the most blunt question would you buy for thirty four billion dollars and we will put it this way quite specifically it is all open source for the most part as I understand it is this not so much a technology excision is perhaps a really big apple higher it's the people of red hat look the people over had are critically important but so is the ecosystem and there is a lot of technology and red hat I mean this is why at their that their company very profitable company that last mile for an enterprise which you are providing is support service in certification and packaging so that is technology and that is critical no one puts that in an enterprise without those features in fact we can rattle off the cases of where they used open source without that and have a lot of problems because enterprises have to be sure it is secure and to end it has been for vision vision controlled and so this is actually to me not only technology play a talent play as well as an ecosystem play in a platform play so this is been I think a great acquisition and if I judge it by our client reception client Jim and I both talked about this a lot hundred percent from clients and whether it's delta airlines to Morgan Stanley they see their future is that hybrid cloud and they want that freedom of choice to whether it's to address the competitive issue environment regulatory as you said this is what we just provided them uniquely that was IBM CEO Ginni Rometty and red hat CEO James Whitehurst and that's all for this edition of Bloomberg best you can see all of our best work at in my best go on the Bloomberg terminal our show is.

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