On this special episode of the Futurum Tech Webcast – Interview Series, I am joined by Ross Mauri, General Manager for IBM Z, for a conversation around optimizing app modernization. This conversation is the first in a three-part series with IBM Z.
The Magic In Optimizing App Modernization
In our conversation we discussed the following:
- The different messages that exist around migrating workloads to the cloud
- A quick reaction on a recent report from Andreessen Horowitz on migration
- An exploration into the things that come to market that are “anti-mainframe”
- The talent needed to keep growing and stay competitive
- How IBM Z is addressing the different trends in the marketplace
It was a great conversation and one you don’t want to miss. Want to learn more about what IBM Z and what they are doing in this space? Check out their website.
Also, be sure to check out the other episodes in the series:
A Look at the Role of IBM Z in Digital Transformation
A Dive Into IBM Z’s AI Value Proposition
You can watch the video of our conversation here (and subscribe to our YouTube channel while you’re there):
Or listen to my interview with Ross on your favorite streaming platform here:
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Disclaimer: The Futurum Tech Webcast is for information and entertainment purposes only. Over the course of this webcast, we may talk about companies that are publicly traded and we may even reference that fact and their equity share price, but please do not take anything that we say as a recommendation about what you should do with your investment dollars. We are not investment advisors and we do not ask that you treat us as such.
Transcript:
Daniel Newman: Hey, everyone. I’m Daniel Newman, principal analyst at Futurum Research. And excited about this series of videos I’m doing here with IBM general manager of the Z business, IBM Z business, Ross Mauri.
Ross Mauri: Hey, Daniel.
Daniel Newman: Hey, Ross.
Ross Mauri: How you doing? Great to be here.
Daniel Newman: I’m great. I’m excited about this series. We’re going to talk about a few different things. We’re going to start off here on app modernization, but there’s going to be a whole series. We’re going to talk a little about AI, about the future of Z. And hopefully everyone out there tunes into this one, but eventually comes back for all these videos because you’re a person I’ve been following for a number of years, as an analyst, someone I really respect, your opinion. You’ve built a really impressive business in IBM Z. And I think the market largely is sort of at this inflection point, and they’re looking at your business. We hear a lot about cloud, we hear a lot about what workloads should be the there, what shouldn’t. We’re talking endlessly about app modernization. And I’d love to get your perspective because you’re in a company that’s dealing on both sides, got a very significant cloud, hybrid cloud business. But also you’ve built a very strong and successful and resilient, for lack of better word, business in the mainframe.
Ross Mauri: So, Daniel, I love talking about these things. And app modernization is on the forefront of our clients’ minds. I really related to what they’re doing with their digital transformation. I mean, and we know this got accelerated by the COVID pandemic. So when our clients are looking at digital transformation, they’re saying to themselves, how do I want change their customers experience? What’s important for that? And what business processes are really involved in that interaction with their customers, whether it’s B2B or B2C. And most clients take it from that perspective and then kind of work back into platforms, software platforms, infrastructure, things like that. And I think that’s the right way to do it. I think that’s the right way to do it.
What I’m seeing with my clients is that they’re being thoughtful about where they want to go. Like for them, journey to cloud isn’t a destination, it’s really more about what architecture do they set up for a sustainable future, for the next decade, at least. They don’t want to keep ripping things up, these are large enterprises. So what’s the architecture they want to set up that makes sense for them, this year and out into the decade.
Daniel Newman: Yeah. When I listen to you speak, I’m thinking, you’re talking about being thoughtful. You’re talking abouts CIOs, and obviously even above that at the governance level of organization, really understanding all the nuance. Your business deals with some of the most complex and regulated industries in the planet, companies that have been very meticulous in making decisions about moving workloads, having to keep them all very secure. And we’ll talk more about that. But the first thing that comes to my mind is it seems like there are certain facets of the business, Ross, of the industry, that are like, no, everything should go to the cloud. Now the data overwhelmingly suggests otherwise, and you could even separate the mainframe part of it, just talk about on-prem and cloud. That it hasn’t happened yet, but you’re starting to hear things, you’re starting to see hyperscale cloud providers saying, don’t worry, we can bulk migrate your workloads right onto the cloud, and without any loss, without any risk. As you’re hearing these things, I have to imagine you have a pretty strong reaction to them.
Ross Mauri: Yeah, it’s interesting. I mean, the hyperscalers have that message because they need to land workload on their cloud or they won’t be profitable, they won’t grow. So I understand why there’s basically a single message from them. But I think again, the large enterprises of the world, governments as well, large institutions, but especially, let’s just say in banking, they’ve got so much to think through, regardless of what country you’re in. Regulatory issues, data security, and privacy issues, and the fact that today’s workloads on their mainframe are the encoding of their business processes. And there’s things that the mainframe does for them today that, quite frankly, no other platform can do still. I realize that’s a technical argument to be had, but I think my clients are looking at well, where does workload make the most sense? I think the cloud paradigm, which is rental versus own, is very appealing to many large clients because they could see someday getting out of their owning their own data center and the capital that that incurs, the expense and the skills needed to run a data center.
I think that’s an appealing thing, but that to me doesn’t mean the end of what you would consider to be on-prem work. Maybe that on-prem work moves to a colo, right next to a hyperscaler or the IBM cloud from a network latency point of view. So I think what’s driving it is a little bit of a false narrative. That’s like, everything’s going to be cheaper and everything’s going to be more agile. That’s what I think is driving a lot of the, if you would, boardroom type of discussion, maybe not understanding a lot of the details. While those are good goals, I think they can get to those goals through many different paths.
Daniel Newman: Which by the way, you and I had a bit of an off the record discussion about this, but it would probably be worth sharing with everybody. Andreessen Horowitz came out with a really interesting report, not too long ago that stirred the pot a bit, looking at a number of the large SaaS companies and sort of that law of diminishing returns or the economies of scale, the elasticity. I don’t know. I’ll pull out all my words from economics 101 in college. But essentially what they’re finding is that at a certain point, those great returns diminish. So we all love the story, the just swipe a credit card and let’s get started on something. And I think many businesses have found, and that part, by the way, this has created crazy app sprawl and shadow IT in organizations as well. But that you can turn it up, but to your point, that idea that the cloud is the best place for all workloads all the time.
We know, I mean, even just think about like edge workloads with just the vast data that’s got to be brought back into the cloud and the volume. There’s a reason that so much effort is being put on processing at the edge because you can’t bring all that data back. And it’s the same thing with transaction volumes that you’re seeing in some of your clients, that volume would just be, you’d get crushed on cost. So I know you read that report, did it give you any sort of impressions?
Ross Mauri: Yeah, it did. It was interesting. It was a surprise when it came out and it was an interesting read and the fact that they a, studied born on the cloud company. So they didn’t start with a traditional company that is going to cloud or went into the cloud, they just started straight up born on the cloud. That’s the paradigm that those startups, most of them are SaaS companies understand. And again, as they grew, as they put it, if you would, the cost of the cloud per revenue dollar, when it became 60%, 70%, 80% cost for revenue gained, it became clearly an untenable situation and those big companies, and they had lots of references in there, moved into their own private type of cloud setup or cluster setup.
So I think it was just surprising that somebody took the time to study all those companies and put together such a thoughtful report. And it’s just a good illustration of why you need to think through, are you going to rent? Are you going to purchase? So what’s right for your business model and right for the time where you are. Are you brand new startup or have you been around for 50 or a hundred years? I mean, there’s different considerations. So as I’d like to still say, I don’t think the cloud, and that means the public cloud, journey to cloud, is a destination. I think it’s got to be an architecture discussion so that you have flexibility because when you hit those crossover points and cost, that you could then easily move the workload to something else and not be locked in to any specific cloud provider.
Daniel Newman: Yeah. And we’ve already seen sort of the hockey puck or whatever you want to call, the ball move a little bit, with all the hybrid cloud, multi-cloud discussion that everyone has sort of figure out there has to be an architecture that’s not going to a hundred percent depend. But what was also interesting with a firm like Andreessen Horowitz to put that out because obviously they’re so heavily invested in very, very born on cloud modern companies. So it was a really pretty raw self-assessment, and I really enjoyed that. Something else that has been said, and these are kind of some of these ideas that come into market that are sort of anti-mainframe that are interesting, is all about DevOps, resources developers, agility, a lack of these types of things while there’s so many of these people and services being built for cloud, but maybe not enough of these things being available on the mainframe or on Z. How do you respond to that? I have to imagine that’s a boardroom question that you’re running into frequently.
Ross Mauri: Yes, Daniel. I get that question all the time and I think points in time are important. And a lot of people’s point in time picture of the mainframe in their head is a black and white picture of a data center with spinning eight track tapes in the background, men in black jackets like this, but with a white shirt and a thin tie and women with a bouffant hairdo who are operating the machine. That’s the picture from the ’70s. And what they haven’t realized is, the mainframes capabilities, and flexibility, and agility has been extraordinarily changed, especially over the last, even just five years. So you’ve got to consider that, let’s just take DevOps. People think of a mainframe, they think of a green screen and subtype of really static development environment that takes years to develop the application and maybe even more years to deploy it. That’s the worst.
What’s really agility on clouds or on mainframe is about what software you have available. And is the software or the DevOps tools, are they familiar to most developers? Do they offer the agility to rapidly prototype, rapidly develop, rapidly test with a lot of automation put in, and then in a somewhat automated way be able to deploy. And you can do all of those DevOps things today with IBM Z. And in fact, you can choose your favorite open source developer tools and plug them in to a framework. We’ve got several frameworks that are out there and we’ve got multiple clients in production doing this. So they’ve got an end to end DevOps process solely done with the best open source tools that they thought were the best, their choice, not our choice, the client’s choice. And so I think agility again, to me, is really about, it starts with the software you have and the same software that’s available on a cloud is available on IBM Z today.
Daniel Newman: Yeah. I think that’s a really interesting point that sometimes the market just misses, Ross, they do miss. And of course every cloud, just like every prem solution, every basic architecture has some software advantages and disadvantages. It doesn’t really matter which one you pick. Open source though, a big part of your story provides a whole lot of flexibility. And by the way, it’s something that many of the people that are developing their hybrid cloud strategies are building around. That we can build on open source, we can make sure we can take off the shelf, but we can also always build it if we need it. But what about the talent? Because every cloud and obviously every open source project requires talent that’s unique. And so do you feel that talent, so you have the agility, you have the DevOps, but is the talent to keep your ecosystem thriving, going to be able to grow fast enough to stay competitive?
Ross Mauri: I think that’s a great question. And maybe the most important question the clients ask me, and I’m going to answer it in a number of ways. So we just talk about general developer skills, so application developer skills. So one of the reasons for us to shift and because we have a set of application development tools that have been around for decades that clients use today. But we added to that, we didn’t get rid of it. We added to this, this open source based modern DevOps pipeline approach set of tools. And the reason is, is so that application developers coming out of high school or out of college, would be very in tune to visual basic or, I mean, sorry, visual studio or whatever type of tool that might be their choice. And so they don’t have to learn the tools, they just have to learn the code. So that’s one barrier to entry that we think we’ve kind of erased for app developers.
But there’s other types of skills that are needed. And one thing we’re doing for operations and system programmer skills is we’re constantly, as we come up with new generations of software and the hardware, is we’re basically taking away all the bells and whistles that used to have to tune very discreetly, on a mainframe 20 or 30 years ago, we’re taking those away because you don’t really need them today. We’ve got machine learning and AI and modern user interfaces that can replace all the complexity of the past. And when we show clients what we’re doing to basically make it so that the skill you used to have to tune SRM parameters, for anybody that know what those are, we came up with workload manager, so you just set a policy. You just have to set a high level policy, don’t have to know the integral technical knobs and whistles. We’re just continuing to do that across the board to, if you would simplify what the external operations and system programmer type of controls are for the system.
So open source tools for application programmers, taking away the complexity, because it’s not needed in today’s world because the machine lots of times can just take care of itself, right? And minimize what we’re bringing forward for humans to look at, are just two prongs in the strategy for skills.
The third one that’s really important is being out there, reaching out to the young folks of the world and I’m talking high school and college, and offering courses for free and contests to start to get them interested in the mainframe. And we’ve been very successful at that. And we also have college specific, university specific programs called our academic initiative, so that the colleges… And there’s about a thousand that have decided to input in their curriculum specifically about the mainframe, about z/OS and other aspects. The graduates that they churn out, get jobs like that. You want to talk about guaranteed employment, just go to one of those colleges. And we continue to expand that program greatly. In fact, we’ve just about doubled our reach over the last three years alone, because now we’re doing it through a lot of partners to help our reach with these programs and contests. And we’re going to keep amplifying that.
So there’s a number of answers to the skills question. And I think that when I talk to clients, I do need to go down into each of those at least three areas, if not others, because they understand where they are today and where they want to get to.
Daniel Newman: Yeah. It’s increasingly evident that the mainframe will continue to coexist. People want to say the PC is dead. People want to say the mainframe, I just think we love the sensational headline. I think evolution is always part of the process. And of course innovation is going to be part of the process as well. And you’ll have to innovate to be more compatible, and we’ll talk more about that even in some of these feature videos.
One thing I would like to kind of wrap this conversation up on though, is some of these broader secular trends and how you and your business are responding to them. You’ve got a big push to automation. You’ve got continuous improvement, CICD. You’ve got a lot of pressure around security, which by the way, has always been something that the mainframe has done extraordinarily well. Even another are secular trend, I’ll give you kind of a menu of options to talk about here on this one is, all of this kind of web 3.0, so much of what we’re hearing about crypto. And I mean, some of those projects are built on Z and on the mainframe. I mean, you guys really are part of a story that’s not just the past, but really evolving. So how are you sort of addressing all those different secular trends?
Ross Mauri: I think that one thing we have in IBM is a very, very deep research team. And I partner with our research team and the general managers before me have partnered with them. So we’re always looking out way over the horizon for what’s coming, and start to plan for it both technically and then preparing our clients so that our clients can take advantage of some of these new technologies when it’s the right time, even though they might not have known it. So what do I mean by that? So we’ve been deep into security for a long time as you know and we continue to put out the most secure server in the world, Pionen. And the data and privacy controls that we deliver our clients depend on, there’s no doubt about it. But what’s next there?
Well, you talk about quantum computing and quantum computers are moving forward very quickly. They’re not ready for full primetime production yet, but how many years is it going to be? Three years, five years? What is it? It’s coming. And the notion that if a rogue state or just the bad guys got a hold of a quantum computer, they could basically do a lot of damage with most of today’s current encryption technologies, which I’m sure you know about. You know that there’s a lot of people harvesting encrypted data, even today, bad guys, and holding onto it, so that someday when they can get their hands on a quantum computer, they can decrypt it.
So five, six years ago, we started working with research on our post quantum crypto technology. And we deployed a little flavor of it in z15, just to make sure we were understanding what we would have to do the change of algorithms and all that. And I would say on the next generation, we’re going to take that to a whole different level. Because post quantum crypto is really important for our clients. We need to get it out there so they can decrypt and re-encrypt their data with these post quantum algorithms and therefore be quantum safe.
So that’s just one area and we’re constantly looking across the board at technologies. For the last 20 years, once we got into Linux, we really went on the open source, open standard side as well. And I think that’s really helped us. It really helped us that by leveraging open standards and open source, we open the mainframe up, we make it more friendly for clients to use it. What do I mean? So we put a spark layer in and kind of hit some of the nuances of, is my data on Db2 or in a VCM file, or flat file. Where is it?
Have a spark interface so the data scientists could just write and access data through that interface, a known open source, open standard set of interfaces. That you’ll see us continuing to do as well, try to open things up via open standards. That’s what we do. That’s what my view is. That’s what my team does. We’re taking the capabilities that our clients demand of the mainframe, security, performance, high availability and resilience, just to be three of them. And we’re never losing site of that’s what our clients are counting on, but then we’re adding the new technologies and taking advantage of them. So that again, it makes the mainframe easier to develop on, easier to access the data on, and more connected with the cloud. We’ve been putting out a lot of connect to cloud software over the last 18 months and the clients that have it in production love it because they can easily build that hybrid cloud infrastructure.
Daniel Newman: Yeah. And that’s a great way to sort of tie this particular conversation together. And I will, I just want to reiterate for everyone out there. I think you made a great point that gets missed a little bit too often about IBM, and that is everything that goes on the research side. The involvement in semiconductor development, I remember reading recently about, two nanometer developments that are going on IBM and quantum and the quantum research and everything from introducing quantum volume as a numeric metric to better understand. I mean, these are a lot of things though that are going on behind this scenes that are going to power the innovation. And of course, you mentioned things like hyper protect services, which I’ve said for a long time, we’re going to see a greater marriage between mainframe and cloud, which to some people may seem contradictory to the whole design, but in the future, the idea is you got to be able to protect that data in all states. And when we can finally do that, those two can start to be much more interdependent as opposed to the current mutual exclusive state.
But Ross Mauri, thanks for this. You got one last word there?
Ross Mauri: Well, quantum computing and confidential computing actually do go together and someday we’ll talk about that.
Daniel Newman: I think we should do that, very soon.
Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
