Tim: Doug, could you talk a little bit about your role at IBM and what it has to do, why you are at LinuxCon right now?
Doug Balog: Yeah, absolutely, so I have a long history at IBM in the infrastructure business, everything from our x86 Servers to our Mainframes to now recently our Unica Products. I am the General Manager for the business, that means accountable for everything associated with you know from product development directions, to strategy, to in quarter sales. So I guess as they say, the buck stops here.
Tim: It sounds like it.
Doug Balog: Yeah.
Tim: So, since we are at LinuxCon, let’s talk a little bit about the involvement of IBM in that world, and how it ties into the POWER architecture?
Doug Balog: Yeah, our role here at LinuxCon is and first off I am thrilled to be here. First off, it’s a great set of community influencers, right, not only influencers but contributors, maintainers, who are really setting the direction in the industry around OpenSource. I am here for a couple of reason at LinuxCon, first off as part of our strategy for POWER, it’s about opening up and capturing new applications. As I like to tell folks, the market has already chosen that new applications in most ways are going to be written on an open stack of software. And therefore as a server provider you can either choose for those applications to run on your platform or not. I’ve chosen for POWER to have those applications run and what kind of applications? They are new mobile enablement applications, they are web enablement application, even many of the analytics applications that are consuming sort of the legacy data, they are being written on an open stack of software as well too. So all those net new applications running on Linux, I want them to run on the POWER platform when it makes sense. So first part of my message to this audience at LinuxCon was we’re in the POWER business to run Linux now in a very serious way and it’s the same Linux. It’s the same Little Indian distribution of memory that tries the same KVM, it’s the same open stack for management, right.
Tim: It’s not people going from one kind of architecture into Mainframes for instance?
Doug Balog: Gone are the days of porting, right? This is now a day of taking what runs already and making it optimized and making it better. So that’s the first part of the message. The other is really talking about the formation we started about a year, year-and-a-half ago with Google, NVIDIA, Mellanox and Tyan as the first five founding members with a shared vision for this moment of time we find ourselves in where the challenge of Moore’s Law, which is the long held belief or view, I shouldn’t say principle, that systems going through density of circuitry continue to contribute to extra performance every two years. Those days are gone, right? But we think through working as a collaborative spirit and what we found with the OpenPOWER Foundation with those original four other founding members are now 50 more that we can continue to deliver the application thirst for performance and memory, but it’s going to take community working together. It’s going to take accelerators, going to take new chip companies, new system companies, it’s going to take software optimization, that community spirit with the OpenPOWER Foundation can deliver on Moore’s Law. So no single company going forward will own the innovation agenda as we’ve seen in the past CMOS Technology era.
Tim: No, it’s been described the Open platform or the POWER platform as the first open server platform.
Doug Balog: Right.
Tim: Can you explain what that means, what does that mean for Open licensing, what is published architectures, what is the Open media?
Doug Balog: Yeah, from one of the bold decisions we had to face in front of ourself is we kind of talked with the likes of Google and others was this demand for best technology and wanting choice in the marketplace. The importance of what we’ve done in the OpenPOWER Foundation and what we’ve agreed to is, we’ve agreed to, similar to the arm model for mobile, we’ll license the POWER technology to anywhere you want to license it. That not only includes derivative rights but also manufacturing rights. So we don’t even have to manufacture it going forward from a licensing perspective. We’ve already seen companies formed, some great examples are a company called Suzhou PowerCore over in China. We don’t all have to follow the press headlines to see a lot of the interest in China around domestic IT, both from a security perspective but as a full transparency and in domestic IT market. So Suzhou plans to take the Power8 technology, do some derivatives off it to be relevant in that market, their own encryption would be an example of that. And bring that to the China market. So again, it’s a licensing model; at the same time we’ve released a bunch of the technology into the OpenPOWER Foundation. Some examples of that would be, we’ve recently released over 420,000 lines of micro code firmware through GitHub. So that people can see, developers can see how to build servers based on POWER in the firmware that does anything from booting to bringing up a virtualization engine, right. Similarly we’ve released this target side of an interface called CAPI, this stands for Coherently Attached Processor Interface, what does that mean? It’s basically the other end of the high-speed bus that allows for everything from FPGAs, field-programmable gate arrays, to NVIDIA Accelerators to memory accelerators to flash accelerators to sort of hang off this high-speed memory bus. I like to describe it has, in Power8 we’ve designed the super-highway, the industry get to design the race cars to ride on it.
Tim: Is IBM in a good place for being part of that entire ecosystem?
Doug Balog: That’s exactly right. And it comes back to the core of the industry is looking for community based innovation. They are looking for no single company sort of driving this agenda and we think OpenPOWER provides that community-based innovation based opportunity.
Tim: Speaking of that, you are working with quite a few Linux vendors.
Dough Balog: Right.
Tim: Rather than the IBM of old that was very integrated hardware and your own operating systems, little complications, right?
Doug Balag: So we’ve started working with.... We have a long history of working with SUSE and Redhat. SUSE and Redhat continue to be great partners on
Tim: And Ubuntu is now a big partner too?
Doug Balog: And I was just going to say, we just added Ubuntu to the mix, and we worked with Mark Shuttleworth and his team, obviously they’ve got a great presence in the cloud, a great presence around open stack and so, as we work to bring POWER to the cloud, the public cloud, not just the on-premise cloud, it was pretty clear to be relevant there working with Mark and the Canonical team made perfect sense. It is about sort of building out in this open community of software, as we’ve brought Power8 to the market at the end of second quarter and seeing strong demand for it, had some significant wins in the MSP space, managed service provider space. What we’re finding is a lot of those clients use open packages, not only in the distro, but outside the distro as well too. And so to help respond to that we’ve put in place an IBM subject matter expert team that can help answer questions around how well it does in addition to IBM software, things like MangoDB and Hadoop and others run on the platform. So it’s a whole new world and OpenSource software that will mix distros and outside the distros are going to be an ever growing popular choice for I think our clients.
Tim: Last year as part of the $1 billion IBM spend in the OpenSource world... One thing you did is you added this kind of system, these POWER systems to work with all the power systems in Linux centers.
Doug Balog: Yes.
Tim: And recently you expanded that somewhat to what I call the Linux and innovation client centers.
Doug Balog: Right, right.
Tim: Can you explain – those are a lot of syllables.
Doug Balog: Yes.
Tim: So what does that mean in reality, does that give more people, more businesses access to actually test out, is it for porting software, talk a little bit about what those mean?
Doug Balog: Yeah, so a year ago my head of development Brad McCredie was here at LinuxCon, again a great opportunity to start telling our story and really a year ago, we were starting to sort of make the promises of our shift to embracing Linux on the platform in a first class manner. And so Brad was here as we’re sharing our plans for not only KVM and Little Indian Linux, but also recognizing you have to provide access to developers to be successful at this, it comes down to where is your ecosystem. That’s the question from clients I get all the time, great story: Doug, where’s your ecosystem?
The innovation centers, reporting centers are all part of that and we’d announced last year several, it grew to five, it started in Beijing, China followed by two in the U.S., New York and Austin; [Montmartre], France, they didn’t want to be left out either and then Tokyo, all right, also not wanting to be left out. They’ve been in strong demand. We’ve seen great use of those facilities and the feedback we got was, where is mine, where is mine and my city, where’s mine and my state, where’s mine and my country. And so as part of today’s announcement we said, let’s just sort of blow it out, let’s go and take full advantage of IBM footprints, innovations centers or client centers we have and populate them all with Power8 technology and Linux.
Now what’s going to be there? It’s going to be educational knowledge for those who want to come in and get educated on the platform, it’s going to be proof of technology, proof of concept, capabilities to demonstrate to clients, to demonstrate to partners _____9:06, the capability and it’s going to be access to the systems to do what they need to do to get their job done. In addition to the centers, which are now over 50, I wanted people want to use a cloud, and so we worked with sites like [Sydox] to put up a Power8 cloud based on Linux as a choice for developers to come in, free of charge I think is our current offer for a short period of time to go and do some development. And of course through our partner World Portal, those were part of the Partner World Network at IBM. They can come in and use another cloud that’s free of charge, so we’re trying to make access to this wonderful technology available. But everybody wherever they are in the world, or whether they want to do it on-premise, through us putting technology on-premise or they want to come to an innovation center or client center or whether they wanted to come to the cloud, all are available now for us to continue to build up this ecosystem.
Tim: Now the Power8 systems were only announced last year.
Doug Balog: Last quarter?
Tim: Last quarter.
Doug Balog: Yes.
Tim: And systems are now available. Is Power8 going to be the platform for years to come or are there major updates that we should expect – I know you can’t speak too ahead of yourself on some of these things, but?
Doug Balog: Yeah, no, it’s a great question, so
Tim: ... with new processors rather than just being a single chip.
Doug Balog: That’s exactly right.
Tim: So talk a little bit about that and I’ll let you close with that if you’d like.
Doug Balog: Yeah, that’s fine, we’ll do that. So we announced as you said Power8 in April of this year last quarter and then started shipping the product in volume with about three weeks to go in the quarter and our quarters are on a calendar quarter basis. So it was I think June 9th if I remember correctly, that started shipping in volume. Sharing with you what our CFO has already shared with the rest of the world, the investors was, very strong take up of Power8 products coming out of the gate. In fact compared to our last generation, and then you don’t always like to look backwards to compare yourself, but it’s one metric, we saw twice the adoption rate of Power8 in the same period of time as we saw with Power7 in 2010, again, good indication of strong interest and strong demand.
One of the other interesting aspects of within that mix, this was the strongest adoption of Linux servers within that mix with Power8, no surprise given our focus and investment and $1 billion in the history of where we find ourself versus 2010. So early indications are indications of hope, right. We’ll see how third quarter comes out, obviously I can’t talk about that, but we’re continuing to expect to see strong demand for Power8. We’re not done though. We’ll have new announcements around Power8 coming out later this year as we take Power8 as we’ve said and expand it across the rest of the portfolio, beyond the one and two socket scale out space into more of the mid-range and high-end.
And so I think in addition to that, taking full advantage of some of these [Cap-E] capability we talked about, we’ll start to see some of those accelerators perhaps come into the market later this year. So that’s kind of in the near term roadmap and then as you would expect beyond Power8 there is the various iterations of the processor. We understand new technology. IBM recently announced $3 billion investment in research around silicon technology, that will continue to yield benefits for the POWER roadmap for years and years to come.