New IBM Power E1080 server promises dramatic increases in energy efficiency, power

We know that large data centers running powerful servers use vast amounts of electricity. Anything that can reduce consumption would be a welcome change, especially in a time of climate upheaval. That’s where the new IBM Power E1080 server, which is powered by the latest Power10 processors, comes into play.

IBM claims it can consolidate the work of 126 competitive servers down to just two E1080s, saving 80% in energy costs, by the company’s estimation. What’s more, the company says, “The new server has set a new world record in a SAP benchmark that measures performance for key SAP applications, needing only half the resources used by x86 competitive servers to beat them by 40%.”

Patrick Moorhead, founder and principal analyst at Moor Insight & Strategy, who closely follows the chip industry, says that the company’s bold claims about what these systems can achieve make sense from a hardware design perspective. “The company’s claims on SAP, Oracle and OpenShift workloads pass initial muster with me as it simply requires less sockets and physical processors to achieve the same performance. These figures were compared to Intel’s Cascade Lake that will be replaced with Sapphire Rapids (in the future),” he said.

Steve Sibley, vice president and business line executive in the Power Systems Group at IBM, says that the new server (and the Power10 chip running it) have been designed for customers looking for a combination of speed, power, efficiency and security. “If you look at what we deliver here with scale and performance, it gives customers even more agility to respond quickly to scale to their highest demands,” he said.

To give customers options, they can buy E1080 servers outright and install them in a company data center. They can buy server access as a service from the IBM cloud (and possibly competitor clouds) or they can rent the servers and install them in their data centers and pay by the minute to help mitigate the cost.

“Our systems are a little bit more expensive on what I call a base cost of acquisition standpoint, but we allow customers to actually purchase [E1080 servers] on an as-a-service basis with a by-the-minute level of granularity of what they’re paying for,” he said.

What’s more, this server, which is the first to be released based on the Power10 chip, is designed to run Red Hat software under the hood, giving the company another outlet for its 2018 $34 billion acquisition.

“Bringing Red Hat’s platform to this platform is a key way to modernize applications, both from just a RHEL (Red Hat Enterprise Linux) operating system environment, as well as OpenShift (the company’s container platform). The other place that has been key with our Red Hat acquisition and our capitalizing on it is that we’re leveraging their Ansible projects and products to drive management and automation on our platform, as well,” Sibley explained.

Since Arvind Krishna took over as CEO at IBM in April 2020, he has been trying to shift the focus of the company to hybrid computing, where some computing exists in the cloud and some on prem, which is the state many companies will find themselves in for many years to come. IBM hopes to leverage Red Hat as a management plane for a hybrid environment, while offering a variety of hardware and software tools and services.

While Red Hat continues to operate as a standalone entity inside IBM, and wants to remain a neutral company for customers, Big Blue is still trying to find ways to take advantage of its offerings whenever possible and using it to run its own systems, and the E1080 provides a key avenue for doing that.

The company says that it is taking orders for the new servers starting immediately and expects to begin shipping systems at the end of the month.


By Ron Miller

Linux 5.14 set to boost future enterprise application security

Linux is set for a big release this Sunday August 29, setting the stage for enterprise and cloud applications for months to come. The 5.14 kernel update will include security and performance improvements.

A particular area of interest for both enterprise and cloud users is always security and to that end, Linux 5.14 will help with several new capabilities. Mike McGrath, vice president, Linux Engineering at Red Hat told TechCrunch that the kernel update includes a feature known as core scheduling, which is intended to help mitigate processor-level vulnerabilities like Spectre and Meltdown, which first surfaced in 2018. One of the ways that Linux users have had to mitigate those vulnerabilities is by disabling hyper-threading on CPUs and therefore taking a performance hit. 

“More specifically, the feature helps to split trusted and untrusted tasks so that they don’t share a core, limiting the overall threat surface while keeping cloud-scale performance relatively unchanged,” McGrath explained.

Another area of security innovation in Linux 5.14 is a feature that has been in development for over a year-and-a-half that will help to protect system memory in a better way than before. Attacks against Linux and other operating systems often target memory as a primary attack surface to exploit. With the new kernel, there is a capability known as memfd_secret () that will enable an application running on a Linux system to create a memory range that is inaccessible to anyone else, including the kernel.

“This means cryptographic keys, sensitive data and other secrets can be stored there to limit exposure to other users or system activities,” McGrath said.

At the heart of the open source Linux operating system that powers much of the cloud and enterprise application delivery is what is known as the Linux kernel. The kernel is the component that provides the core functionality for system operations. 

The Linux 5.14 kernel release has gone through seven release candidates over the last two months and benefits from the contributions of 1,650 different developers. Those that contribute to Linux kernel development include individual contributors, as well large vendors like Intel, AMD, IBM, Oracle and Samsung. One of the largest contributors to any given Linux kernel release is IBM’s Red Hat business unit. IBM acquired Red Hat for $34 billion in a deal that closed in 2019.

“As with pretty much every kernel release, we see some very innovative capabilities in 5.14,” McGrath said.

While Linux 5.14 will be out soon, it often takes time until it is adopted inside of enterprise releases. McGrath said that Linux 5.14 will first appear in Red Hat’s Fedora community Linux distribution and will be a part of the future Red Hat Enterprise Linux 9 release. Gerald Pfeifer, CTO for enterprise Linux vendor SUSE, told TechCrunch that his company’s openSUSE Tumbleweed community release will likely include the Linux 5.14 kernel within ‘days’ of the official release. On the enterprise side, he noted that SUSE Linux Enterprise 15 SP4, due next spring, is scheduled to come with Kernel 5.14. 

The new Linux update follows a major milestone for the open source operating system, as it was 30 years ago this past Wednesday that creator Linus Torvalds (pictured above) first publicly announced the effort. Over that time Linux has gone from being a hobbyist effort to powering the infrastructure of the internet.

McGrath commented that Linux is already the backbone for the modern cloud and Red Hat is also excited about how Linux will be the backbone for edge computing – not just within telecommunications, but broadly across all industries, from manufacturing and healthcare to entertainment and service providers, in the years to come.

The longevity and continued importance of Linux for the next 30 years is assured in Pfeifer’s view.  He noted that over the decades Linux and open source have opened up unprecedented potential for innovation, coupled with openness and independence.

“Will Linux, the kernel, still be the leader in 30 years? I don’t know. Will it be relevant? Absolutely,” he said. “Many of the approaches we have created and developed will still be pillars of technological progress 30 years from now. Of that I am certain.”

 

 


By Sean Michael Kerner

What does Red Hat’s sale to IBM tell us about Couchbase’s valuation?

The IPO rush of 2021 continued this week with a fresh filing from NoSQL provider Couchbase. The company raised hundreds of millions while private, making its impending debut an important moment for a number of private investors, including venture capitalists.

According to PitchBook data, Couchbase was last valued at a post-money valuation of $580 million when it raised $105 million in May 2020. The company — despite its expansive fundraising history — is not a unicorn heading into its debut to the best of our knowledge.

We’d like to uncover whether it will be one when it prices and starts to trade, so we dug into Couchbase’s business model and its financial performance, hoping to better understand the company and its market comps.

The Couchbase S-1

The Couchbase S-1 filing details a company that sells database tech. More specifically, Couchbase offers customers database technology that includes what NoSQL can offer (“schema flexibility,” in the company’s phrasing), as well as the ability to ask questions of their data with SQL queries.

Couchbase’s software can be deployed on clouds, including public clouds, in hybrid environments, and even on-prem setups. The company sells to large companies, attracting 541 customers by the end of its fiscal 2021 that generated $107.8 million in annual recurring revenue, or ARR, by the close of last year.

Couchbase breaks its revenue into two main buckets. The first, subscription, includes software license income and what the company calls “support and other” revenues, which it defines as “post-contract support,” or PCS, which is a package of offerings, including “support, bug fixes and the right to receive unspecified software updates and upgrades” for the length of the contract.

The company’s second revenue bucket is services, which is self-explanatory and lower-margin than its subscription products.


By Alex Wilhelm

Red Hat CEO looks to maintain double-digit growth in second year at helm

Red Hat CEO Paul Cormier runs the centerpiece of IBM’s transformation hopes. When Big Blue paid $34 billion for his company in 2018, it was because it believed it could be the linchpin of the organization’s shift to a focus on hybrid computing.

In its most recent earnings report, IBM posted positive revenue growth for only the second time in 8 quarters, and it was Red Hat’s 15% growth that led the way. Cormier recognizes the role his company plays for IBM, and he doesn’t shy away from it.

As he told me in an interview this week ahead of the company’s Red Hat Summit, a lot, a lot of cloud technology is based on Linux, and as the company that originally made its name selling Red Hat Enterprise Linux (RHEL), he says that is a technology his organization is very comfortable working with. He sees the two companies working well together with Red Hat benefitting from having IBM sell his company’s software, while remaining neutral technologically, something that benefits customers and pushes the overall IBM vision.

Quite a first year

Even though Cormier has been with Red Hat for 20 years, he took over as its CEO after Arvind Krishna replaced Ginni Rometty as IBM’s chief executive, and long-time Red Hat CEO Jim Whitehurst moved over to a role at IBM last April. Cormier stepped in as leader just as the pandemic hit the U.S. with its full force.

“Going into my first year of a pandemic, no one knew what the business was going to look like, and not that we’re completely out of the woods yet, but we have weathered that pretty well,” he said.

Part of the reason for that is because like many software companies, he has seen his customers shifting to the cloud much faster than anyone thought previously. While the pandemic acted as a forcing event for digital transformation, it has left many companies to manage a hybrid on-prem and cloud environment, a place where Red Hat can help.

“Having a hybrid architecture brings a lot of value […], but it’s complex. It just doesn’t happen by magic, and I think we helped a lot of customers, and it accelerated a lot of things by years of what was going to happen anyways,” Cormier told me.

In terms of the workforce moving to work from home, Red Hat had 25% of its workforce doing that even before the pandemic, so the transition wasn’t as hard as you might think for a company of its size. “Most every meeting at Red Hat had someone on remotely [before the pandemic]. And so we just sort of flipped into that mode overnight. I think we had an easier time than others for that reason,” he said.

Acting as IBM’s growth engine

Red Hat’s 15% growth was a big reason for IBM showing modest revenue growth last quarter, something that has been hard to come by for the last seven years. At IBM’s earnings call with analysts, CEO Krishna and CFO Jim Kavanaugh both saw Red Hat maintaining that double digit growth as key to driving the company towards more stable positive revenue in the coming years.

Cormier says that he anticipates the same things that IBM expects — and that Red Hat is up to the task ahead of it. “We see that growth continuing to happen as it’s a huge market, and this is the way it’s really playing out. We share the optimism,” he explained.

While he understands that Red Hat must remain neutral and work with multiple cloud partners, IBM is free to push Red Hat, and having that kind of sales clout behind it is also helping drive Red Hat revenue. “What IBM does for us is they open the door for us in many more places. They are in many more countries than we were [prior to the acquisition], and they have a lot of high level relationships where they can open the door for us,” he said.

In fact, Cormier points out that IBM salespeople have quotas to push Red Hat in their biggest accounts. “IBM sales is very incentivized to bring Red Hat in to help solve customer problems with Red Hat products,” he said.

No pressure or anything

When you’re being billed as a savior of sorts for a company as storied as IBM, it wouldn’t be surprising for Cormier to feel the weight of those expectations. But if he is he doesn’t seem to show it. While he acknowledges that there is pressure, he argues that it’s no different from being a public company, only the stakeholders have changed.

“Sure it’s pressure, but prior to [being acquired] we were a public company. I look at Arvind as the chairman of the board and IBM as our shareholders. Our shareholders put a lot of pressure on us too [when we were public]. So I don’t feel any more pressure with IBM and with Arvind than we had with our shareholders,” he said.

Although they represent only 5% of IBM’s revenue at present, Cormier knows it isn’t really about that number, per se. It’s about what his team does and how that fits in with IBM’s transformation strategy overall.

Being under pressure to deliver quarter after quarter is the job of any CEO, especially one that’s in the position of running a company like Red Hat under a corporation like IBM, but Cormier as always appears to be comfortable in his own skin and confident in his company’s ability to continue chugging along as it has been with that double-digit growth. The market potential is definitely there. It’s up to Red and Hat and IBM to take advantage.


By Ron Miller

Google’s Anthos multi-cloud platform gets improved logging, Windows container support and more

Google today announced a sizable update to its Anthos multi-cloud platform that lets you build, deploy and manage containerized applications anywhere, including on Amazon’s AWS and (in preview) and Microsoft Azure.

Version 1.7 includes new features like improved metrics and logging for Anthos on AWS, a new Connect gateway to interact with any cluster right from Google Cloud and a preview of Google’s managed control plane for Anthos Service Mesh. Other new features include Windows container support for environments that use VMware’s vSphere platform and new tools for developers to make it easier for them to deploy their applications to any Anthos cluster.

Today’s update comes almost exactly two years after Google CEO Sundar Pichai originally announced Anthos at its Cloud Next event in 2019 (before that, Google called this project the ‘Google Cloud Services Platform,’ which launched three years ago). Hybrid- and multi-cloud, it’s fair to say, takes a key role in the Google Cloud roadmap — and maybe more so for Google than for any of its competitors. And recently, Google brought on industry veteran Jeff Reed to become the VP of Product Management in charge of Anthos.

Reed told me that he believes that there are a lot of factors right now that are putting Anthos in a good position. “The wind is at our back. We bet on Kubernetes, bet on containers — those were good decisions,” he said. Increasingly, customers are also now scaling out their use of Kubernetes and have to figure out how to best scale out their clusters and deploy them in different environments — and to do so, they need a consistent platform across these environments. He also noted that when it comes to bringing on new Anthos customers, it’s really those factors that determine whether a company will look into Anthos or not.

He acknowledged that there are other players in this market, but he argues that Google Cloud’s take on this is also quite different. “I think we’re pretty unique in the sense that we’re from the cloud, cloud-native is our core approach,” he said. “A lot of what we talk about in [Anthos] 1.7 is about how we leverage the power of the cloud and use what we call ‘an anchor in the cloud’ to make your life much easier. We’re more like a cloud vendor there, but because we support on-prem, we see some of those other folks.” Those other folks being IBM/Red Hat’s OpenShift and VMware’s Tanzu, for example. 

The addition of support for Windows containers in vSphere environments also points to the fact that a lot of Anthos customers are classical enterprises that are trying to modernize their infrastructure, yet still rely on a lot of legacy applications that they are now trying to bring to the cloud.

Looking ahead, one thing we’ll likely see is more integrations with a wider range of Google Cloud products into Anthos. And indeed, as Reed noted, inside of Google Cloud, more teams are now building their products on top of Anthos themselves. In turn, that then makes it easier to bring those services to an Anthos-managed environment anywhere. One of the first of these internal services that run on top of Anthos is Apigee. “Your Apigee deployment essentially has Anthos underneath the covers. So Apigee gets all the benefits of a container environment, scalability and all those pieces — and we’ve made it really simple for that whole environment to run kind of as a stack,” he said.

I guess we can expect to hear more about this in the near future — or at Google Cloud Next 2021.

 


By Frederic Lardinois

RedHat is acquiring container security company StackRox

RedHat today announced that it’s acquiring container security startup StackRox . The companies did not share the purchase price.

RedHat, which is perhaps best known for its enterprise Linux products has been making the shift to the cloud in recent years. IBM purchased the company in 2018 for a hefty $34 billion and has been leveraging that acquisition as part of a shift to a hybrid cloud strategy under CEO Arvind Krishna.

The acquisition fits nicely with RedHat OpenShift, its container platform, but the company says it will continue to support StackRox usage on other platforms including AWS, Azure and Google Cloud Platform. This approach is consistent with IBM’s strategy of supporting multi-cloud, hybrid environments.

In fact, Red Hat president and CEO Paul Cormier sees the two companies working together well. “Red Hat adds StackRox’s Kubernetes-native capabilities to OpenShift’s layered security approach, furthering our mission to bring product-ready open innovation to every organization across the open hybrid cloud across IT footprints,” he said in a statement.

CEO Kamal Shah, writing in a company blog post announcing the acquisition, explained that the company made a bet a couple of years ago on Kubernetes and it has paid off. “Over two and half years ago, we made a strategic decision to focus exclusively on Kubernetes and pivoted our entire product to be Kubernetes-native. While this seems obvious today; it wasn’t so then. Fast forward to 2020 and Kubernetes has emerged as the de facto operating system for cloud-native applications and hybrid cloud environments,” Shah wrote.

Shah sees the purchase as a way to expand the company and the road map more quickly using the resources of Red Hat (and IBM), a typical argument from CEOs of smaller acquired companies. But the trick is always finding a way to stay relevant inside such a large organization.

StackRox’s acquisition is part of some consolidation we have been seeing in the Kubernetes space in general and the security space more specifically. That includes Palo Alto Networks acquiring competitor TwistLock for $410 million in 2019. Another competitor, Aqua Security, which has raised $130 million, remains independent.

StackRox was founded in 2014 and raised over $65 million, according to Crunchbase data. Investors included Menlo Ventures, Redpoint and Sequoia Capital. The deal is expected to close this quarter subject to normal regulatory scrutiny.


By Ron Miller

IBM CEO Arvind Krishna wants to completely transform his organization

When IBM announced it was spinning out its infrastructure services business last month, it was surely a sign that the company was going all in on hybrid cloud. Today in an interview with Jon Fortt at the CNBC Evolve summit, IBM CEO Arvind Krishna made it clear that his whole focus is going to be on transforming his organization into a hybrid cloud management vendor moving forward.

That means that instead of trying to primarily sell its own infrastructure or software services — although it will continue to do that — it will concentrate on leveraging Red Hat, the company it bought for $34 billion in 2018, to help customers manage their hybrid environments regardless of location. That could be on prem or it could be with any of the public cloud providers or anything in between.

Krishna sees this acquisition as a key part of the transition strategy to capture what he estimates is a trillion dollar opportunity in the hybrid cloud management market, and he believes his company is well positioned to grab a piece of that. “The Red Hat acquisition gave us the technology base on which to build a hybrid cloud technology platform based on open source, and based on giving choice to our clients as they embark on this journey. With the success of that acquisition now giving us the fuel, we can then take the next step, and the larger step, of taking the managed infrastructure services out. So the rest of the company can be absolutely focused on hybrid cloud and artificial intelligence,” Krishna told CNBC.

While he recognizes that Microsoft and Amazon are powerful players in the public cloud, he doesn’t see them as competitors, so much as partners in this new approach. In fact, mixing in a broad variety of third party partners is a big part of this.

“I look at both Microsoft and Amazon as likely partners in this journey, not as being the one and two [in market share]. In the hybrid world the question is where does the client want to decide where the workload runs? They could run it on Amazon. They can run on Microsoft. They can run it on IBM or they can run it on premises,” he said.

He believes that Red Hat can be the glue to hold this environment together and let customers have a single way of managing this complexity. The key question for IBM is whether customers see IBM and by extension Red Hat, as the key vendor for this role.

He recognizes that this isn’t just about adding and subtracting technology pieces. When it comes to transforming the way you do business in this way, it requires a massive cultural shift, one we saw Satya Nadella pull off when he took over as CEO at Microsoft in 2014. Much like Nadella, Krishna was promoted from within. He understands how things operate and that he needs to change the way things have traditionally been done at Big Blue if he’s going to succeed.

“I’ve talked a lot internally about a growth mindset, and about being much more entrepreneurial. And we can be entrepreneurs, even within large companies. But it comes from having extreme focus. So when we provide the focus of being focused on hybrid cloud and artificial intelligence, which I believe are the two fundamental forces, then you say how do you unlock everybody being able to go after that,” he said.

That’s going to be the big key for him moving forward as transforming a company the size of IBM is going to be a tremendous challenge for him as a leader. As Fortt pointed out, IBM salespeople are used to focusing on IBM products. This approach means they have to look at the market much more broadly, and that requires a new mindset. It will be up to Krishna to lead the way and make sure that his employees are on the same page about this. The success of this approach depends on that.


By Ron Miller

As IBM spins out legacy infrastructure management biz, CEO goes all in on the cloud

When IBM announced this morning that it was spinning out its legacy infrastructure services business, it was a clear signal that new CEO Arvand Krishna, who took the reins in April, was ready to fully commit his company to the cloud.

The move was a continuation of the strategy the company began to put in place when it bought Red Hat in 2018 for the princely sum of $34 billion. That purchase signaled a shift to a hybrid-cloud vision, where some of your infrastructure lives on-premises and some in the cloud — with Red Hat helping to manage it all.

Even as IBM moved deeper into the hybrid cloud strategy, Krishna saw the financial results like everyone else and recognized the need to focus more keenly on that approach. In its most recent earnings report overall IBM revenue was $18.1 billion, down 5.4% compared to the year-ago period. But if you broke out just IBM’s cloud and Red Hat revenue, you saw some more promising results: cloud revenue was up 30 percent to $6.3 billion, while Red Hat-derived revenue was up 17%.

Even more, cloud revenue for the trailing 12 months was $23.5 billion, up 20%.

You don’t need to be a financial genius to see where the company is headed. Krishna clearly saw that it was time to start moving on from the legacy side of IBM’s business, even if there would be some short-term pain involved in doing so. So the executive put his resources into (as they say) where the puck is going. Today’s news is a continuation of that effort.

The managed infrastructure services segment of IBM is a substantial business in its own right, but Krishna was promoted to CEO to clean house, taking over from Ginni Rometti to make hard decisions like this.

While its cloud business is growing, Synergy Research data has IBM public cloud market share mired in single digits with perhaps 4 or 5%. In fact, Alibaba has passed its market share, though both are small compared to the market leaders Amazon, Microsoft and Google.

Like Oracle, another legacy company trying to shift more to the cloud infrastructure business, IBM has a ways to go in its cloud evolution.

As with Oracle, IBM has been chasing the market leaders — Google at 9%, Microsoft 18% and AWS with 33% share of public cloud revenue (according to Synergy) — for years now without much change in its market share. What’s more, IBM competes directly with Microsoft and Google, which are also going after that hybrid cloud business with more success.

While IBM’s cloud revenue is growing, its market share needle is stuck and Krishna understands the need to focus. So, rather than continue to pour resources into the legacy side of IBM’s business, he has decided to spin out that part of the company, allowing more attention for the favored child, the hybrid cloud business.

It’s a sound strategy on paper, but it remains to be seen if it will have a material impact on IBM’s growth profile in the long run. He is betting that it will, but then what choice does he have?


By Ron Miller

IBM confirms layoffs are happening, but won’t provide details

IBM confirmed reports from over night that it is conducting layoffs, but wouldn’t provide details related to location, departments or number of employees involved. The company framed it in terms of replacing people with more needed skills as it tries to regroup under new CEO Arvind Krishna.

IBM’s work in a highly competitive marketplace requires flexibility to constantly remix to high-value skills, and our workforce decisions are made in the long-term interests of our business,” an IBM spokesperson told TechCrunch.

Patrick Moorhead, principal analyst at Moor Insights & Strategy says he’s hearing the layoffs are hitting across the business. “I’m hearing it’s a balancing act between business units. IBM is moving as many resources as it can to the cloud. Essentially, you lay off some of the people without the skills you need and who can’t be re-educated and you bring in people with certain skill sets. So not a net reduction in headcount,” Moorhead said.

It’s worth noting that IBM used a similar argument back in 2015 when it reportedly had layoffs. While there is no official number, Bloomberg is reporting that today’s number is in the thousands.

Holger Mueller, an analyst at Constellation Research, says that IBM is in a tough spot. “The bets of the past have not paid off. IBM Cloud as IaaS is gone, Watson did not deliver and Blockchain is too slow to keep thousands of consultants occupied,” he said.

Mueller adds that the company could also be feeling the impact of having workers at home instead of in the field. “Enterprises do not know and have not learnt how to do large software projects remotely. […] And for now enterprises are slowing down on projects as they are busy with reopening plans,” he said.

The news comes against the backdrop of companies large and small laying off large numbers of employees as the pandemic takes its toll on the workforce. IBM was probably due for a workforce reduction, regardless of the current macro situation as Krishna tries to right the financial ship.

The company has struggled in recent years, and with the acquisition of Red Hat for $34 billion in 2018, it is hoping to find its way as a more open hybrid cloud option. It apparently wants to focus on skills that can help them get there.

The company indicated that it would continue to subsidize medical expenses for laid off employees through June 2021, so there is that.


By Ron Miller

IBM and Red Hat expand their telco, edge and AI enterprise offerings

At its Think Digital conference, IBM and Red Hat today announced a number of new services that all center around 5G edge and AI. The fact that the company is focusing on these two areas doesn’t come as a surprise, given that both edge and AI are two of the fastest-growing businesses in enterprise computing. Virtually every telecom company is now looking at how to best capitalize on the upcoming 5G rollouts, and most forward-looking enterprises are trying to figure out how to best plan around this for their own needs.

As IBM’s recently minted president Jim Whitehurst told me ahead of today’s announcement, he believes that IBM (in combination with Red Hat) is able to offer enterprises a very differentiated service because, unlike the large hyper clouds, IBM isn’t interested in locking these companies into a homogeneous cloud.

“Where IBM is competitively differentiated, is around how we think about helping clients on a journey to what we call hybrid cloud,” said Whitehurst, who hasn’t done a lot of media interviews since he took the new role, which still includes managing Red Hat. “Honestly, everybody has hybrid clouds. I wish we had a more differentiated term. One of the things that’s different is how we’re talking about how you think about an application portfolio that, by necessity, you’re going to have in multiple ways. If you’re a large enterprise, you probably have a mainframe running a set of transactional workloads that probably are going to stay there for a long time because there’s not a great alternative. And there’s going to be a set of applications you’re going to want to run in a distributed environment that need to access that data — all the way out to you running a factory floor and you want to make sure that the paint sprayer doesn’t have any defects while it’s painting a door.”

BARCELONA, CATALONIA, SPAIN – 2019/02/25: The IBM logo is seen during MWC 2019. (Photo by Paco Freire/SOPA Images/LightRocket via Getty Images)

He argues that IBM, at its core, is all about helping enterprises think about how to best run their workloads software, hardware and services perspective. “Public clouds are phenomenal, but they are exposing a set of services in a homogeneous way to enterprises,” he noted, while he argues that IBM is trying to weave all of these different pieces together.

Later in our discussion, he argued that the large public clouds essentially force enterprises to fit their workloads to those clouds’ service. “The public clouds do extraordinary things and they’re great partners of ours, but their primary business is creating these homogeneous services, at massive volumes, and saying ‘if your workloads fit into this, we can run it better, faster, cheaper etc.’ And they have obviously expanded out. They’ve added services. They are not saying we can put a box on-premise, but you’re still fitting into their model.”

On the news side, IBM is launching new services to automate business planning, budgeting and forecasting, for example, as well as new AI-driven tools for building and running automation apps that can handle routine tasks either autonomously or with the help of a human counterpart. The company is also launching new tools for call-center automation.

The most important AI announcement is surely Watson AIOps, though, which is meant to help enterprises detect, diagnose and respond to IT anomalies in order to reduce the effects of incidents and outages for a company.

On the telco side, IBM is launching new tools like the Edge Application Manager, for example, to make it easier to enable AI, analytics and IoT workloads on the edge, powered by IBM’s open-source Open Horizon edge computing project. The company is also launching a new Telco Network Cloud manager built on top of Red Hat OpenShift and the ability to also leverage the Red Hat OpenStack Platform (which remains to be an important platform for telcos and represents a growing business for IBM/Red Hat). In addition, IBM is launching a new dedicated IBM Services team for edge computing and telco cloud to help these customers build out their 5G and edge-enabled solutions.

Telcos are also betting big on a lot of different open-source technologies that often form the core of their 5G and edge deployments. Red Hat was already a major player in this space, but the acquisition has only accelerated this, Whitehurst argued. “Since the acquisition […] telcos have a lot more confidence in IBM’s capabilities to serve them long term and be able to serve them in mission-critical context. But importantly, IBM also has the capability to actually make it real now.”

A lot of the new telco edge and hybrid cloud deployments, he also noted, are built on Red Hat technologies but built by IBM, and neither IBM nor Red Hat could have really brought these to fruition in the same way. Red Hat never had the size, breadth and skills to pull off some of these projects, Whitehurst argued.

Whitehurst also argued that part of the Red Hat DNA that he’s bringing to the table now is helping IBM to think more in terms of ecosystems. “The DNA that I think matters a lot that Red Hat brings to the table with IBM — and I think IBM is adopting and we’re running with it — is the importance of ecosystems,” he said. “All of Red Hat’s software is open source. And so really, what you’re bringing to the table is ecosystems.”

It’s maybe no surprise then that the telco initiatives are backed by partners like Cisco, Dell Technologies, Juniper, Intel, Nvidia, Samsung, Packet, Equinix, Hazelcast, Sysdig, Turbonomics, Portworx, Humio, Indra Minsait, EuroTech, Arrow, ADLINK, Acromove, Geniatech, SmartCone, CloudHedge, Altiostar, Metaswitch, F5 Networks and ADVA.

In many ways, Red Hat pioneered the open-source business model and Whitehurst argued that having Red Hat as part of the IBM family means it’s now easier for the company to make the decision to invest even more in open source. “As we accelerate into this hybrid cloud world, we’re going to do our best to leverage open-source technologies to make them real,” he added.


By Frederic Lardinois

New Red Hat CEO Paul Cormier faces a slew of challenges in the midst of pandemic

When former Red Hat CEO Jim Whitehurst moved on to become president at parent company IBM earlier this month, the logical person to take his place was long-time executive Paul Cormier. As he takes over in the most turbulent of times, he still sees a company that is in the right place to help customers modernize their approach to development as they move more workloads to the cloud.

We spoke to Cormier yesterday via video conference, and he appeared to be a man comfortable in his new position. We talked about the changes his new role has brought him personally, how he his helping his company navigate the current situation and how his relationship with IBM works.

One thing he stressed was that even as part of the IBM family, his company is running completely independently, and that includes no special treatment for IBM. It’s just another customer, an approach he says is absolutely essential.

Taking over

He says that he felt fully prepared for the role having run the gamut of jobs over the years from engineering to business units to CTO. The big difference for him as CEO is that in all of his previous roles he could be the technical guy speaking a certain engineering language with his colleagues. As CEO, things have changed, especially during a time where communication has become paramount.

This has been an even bigger challenge in the midst of the pandemic. Instead of traveling to offices for meetings, chatting over informal coffees and having more serendipitous encounters, he has had to be much more deliberate in his communication to make sure his employees feel in the loop, even when they are out of the office.

“I have a company-wide meeting every two weeks. You can’t over communicate right now because it just doesn’t happen [naturally in the course of work]. I’ve got to consciously do it now, and that’s probably the biggest thing,” he said.

Go-to-market challenges

While Cormier sees little change on the engineering side, where many folks have been working remotely for some time, the go-to-market team could face more serious hurdles as they try to engage with customers.

“The go-to-market and sales side is going to be the challenge because we don’t know how our customers will come out of this. Everybody’s going to have different strategies on how they’re coming out of this, and that will drive a lot,” he said.

This week was Cormier’s first Red Hat Summit as CEO, one that like so many conferences had to pivot from a live event to virtual fairly quickly. Customers have been nervous, and this was the first chance to really reconnect with them since things have shut down. He says that he was pleasantly surprised how well it worked, even allowing more people to attend than might pay to travel to a live event.

Conferences are a place for the sales team to really shine and lay the groundwork for future sales. Not being there in person had to be a big change for them, but he says this week went better than he expected, and they learned a ton about running virtual events that they will carry forth into the future.

“We all miss the face-to-face for sure, but I think we’ve learned new things, and I think our team did an amazing job in pulling this off,” he said.

No favorites for IBM

As he navigates his role inside the IBM family, he says that new CEO Arvind Krishna has effectively become his board of directors, now that the company has gone private. When IBM paid $34 billion for Red Hat in 2018, it was looking for a way to modernize the company and to become a real player in the hybrid cloud market.

Hybrid involves finding a way to manage infrastructure that lives on premises as well as in the cloud without having to use two sets of tools. While IBM is all in on Red Hat, Cormier says it’s absolutely essential to their relationship with customers that they don’t show them any favoritism, and that includes no special pricing deals.

Not only that, he says that he has the freedom to run the company the way he sees fit. “IBM doesn’t set our product strategy. They don’t set our priorities. They know that over time our open source products could eat into what they are doing with their proprietary products, and they are okay with that. They understand that,” he said.

He says that doing it any other way could begin to erode the reason that IBM spent all that money in the first place, and it’s up to Cormier to make sure that they continue to do what they were doing and keep customers comfortable with that. So far, the company seems to be heading in the same upward trajectory it was on as a public company.

In the most recent earnings report in January, IBM reported Red Hat income of $1.07 billion, up from $863 million the previous year when it was still a private company. That’s a run rate of over $4 billion, putting it well within reach of the $5 billion goal Whitehurst set a few years ago.

Now it’s Cormier’s job to get them there and beyond. The pandemic certainly makes it more challenging, but he’s ready to lead the company to that next level, all while walking the line as the CEO of a company that lives under the IBM family umbrella and all that entails.


By Ron Miller

Incoming IBM CEO Arvind Krishna faces monumental challenges on multiple fronts

Arvind Krishna is not the only CEO to step into a new job this week, but he is the only one charged with helping turn around one of the world’s most iconic companies. Adding to the degree of difficulty, he took the role in the midst of a global pandemic and economic crisis. No pressure or anything.

IBM has struggled in recent years to find its identity as technology has evolved rapidly. While Krishna’s predecessor Ginni Rometty left a complex legacy as she worked to bring IBM into the modern age, she presided over a dreadful string of 22 straight quarters of declining revenue, a record Krishna surely hopes to avoid.

Strong headwinds

To her credit, under Rometty the company tried hard to pivot to more modern customer requirements, like cloud, artificial intelligence, blockchain and security. While the results weren’t always there, Krishna acknowledged in an email employees received on his first day that she left something to build on.

“IBM has already built enduring platforms in mainframe, services and middleware. All three continue to serve our clients. I believe now is the time to build a fourth platform in hybrid cloud. An essential, ubiquitous hybrid cloud platform our clients will rely on to do their most critical work in this century. A platform that can last even longer than the others,” he wrote.

But Ray Wang, founder and principal analyst at Constellation Research, says the market headwinds the company faces are real, and it’s going to take some strong leadership to get customers to choose IBM over its primary cloud infrastructure competitors.

“His top challenge is to restore the trust of clients that IBM has the latest technology and solutions and is reinvesting enough in innovation that clients want to see. He has to show that IBM has the same level of innovation and engineering talent as the hyper scalers Google, Microsoft and Amazon,” Wang explained.

Cultural transformation


By Ron Miller

Paul Cormier takes over as Red Hat CEO, as Jim Whitehurst moves to IBM

When Ginni Rometty indicated that she was stepping down as IBM CEO at the end of January, the company announced that Arvind Krishna would be taking over, while Red Hat CEO Jim Whitehurst would become president. To fill his role, Red Hat announced today that long-time executive Paul Cormier has been named president and CEO.

Cormier would seem to be a logical choice to run Red Hat, having been with the company since 2001. He joined as its VP of engineering and has seen the company grow from a small startup to a multi-billion dollar company.

Cormier spoke about the historical arc he has witnessed in his years at Red Hat. “Looking back to when I joined, we were in a different position and facing different issues, but the spirit was the same. We were on a mission to convince the world that open source was real, safe and enterprise-grade,” Cormier said in an email to employees about his promotion.

Former CEO Whitehurst certainly sees this as a sensible transition. “After working with him closely for more than a decade, I can confidently say that Paul was the natural choice to lead Red Hat. Having been the driving force behind Red Hat’s product strategy for nearly two decades, he’s been intimately involved in setting the company’s direction and uniquely understands how to help customers and partners make the most out of their cloud strategy,” he said in a statement.

In a Q&A with Cormier on the company website, he talked about the kind of changes he expects to see under his leadership in the next five years of the company. “There’s a term that we use today, ‘applications run the business.’ In five years, I see it becoming the case for the majority of enterprises. And with that, the infrastructure underpinning these applications will be even more critical. Management and security are paramount — and this isn’t just one environment. It’s bare metal and hypervisors to public and private clouds. It’s Linux, VMs, containers, microservices and more,” he said.

When IBM bought Red Hat in 2018 for $34 billion, there was widespread speculation that Whitehurst would eventually take over in an executive position there. Now that that has happened, Cormier will step into run Red Hat.

While Red Hat is under the IBM umbrella, it continues to operate as a separate company with its own executive structure, but that vision that Cormier outlined is in line with how it will fit within the IBM family as it tries to make its mark on the shifting cloud and enterprise open source markets.


By Ron Miller

Making sense of a multi-cloud, hybrid world at KubeCon

More than 12,000 attendees gathered this week in San Diego to discuss all things containers, Kubernetes and cloud-native at KubeCon.

Kubernetes, the container orchestration tool, turned five this year, and the technology appears to be reaching a maturity phase where it accelerates beyond early adopters to reach a more mainstream group of larger business users.

That’s not to say that there isn’t plenty of work to be done, or that most enterprise companies have completely bought in, but it’s clearly reached a point where containerization is on the table. If you think about it, the whole cloud-native ethos makes sense for the current state of computing and how large companies tend to operate.

If this week’s conference showed us anything, it’s an acknowledgment that it’s a multi-cloud, hybrid world. That means most companies are working with multiple public cloud vendors, while managing a hybrid environment that includes those vendors — as well as existing legacy tools that are probably still on-premises — and they want a single way to manage all of this.

The promise of Kubernetes and cloud-native technologies, in general, is that it gives these companies a way to thread this particular needle, or at least that’s the theory.

Kubernetes to the rescue

Photo: Ron Miller/TechCrunch

If you were to look at the Kubernetes hype cycle, we are probably right about at the peak where many think Kubernetes can solve every computing problem they might have. That’s probably asking too much, but cloud-native approaches have a lot of promise.

Craig McLuckie, VP of R&D for cloud-native apps at VMware, was one of the original developers of Kubernetes at Google in 2014. VMware thought enough of the importance of cloud-native technologies that it bought his former company, Heptio, for $550 million last year.

As we head into this phase of pushing Kubernetes and related tech into larger companies, McLuckie acknowledges it creates a set of new challenges. “We are at this crossing the chasm moment where you look at the way the world is — and you look at the opportunity of what the world might become — and a big part of what motivated me to join VMware is that it’s successfully proven its ability to help enterprise organizations navigate their way through these disruptive changes,” McLuckie told TechCrunch.

He says that Kubernetes does actually solve this fundamental management problem companies face in this multi-cloud, hybrid world. “At the end of the day, Kubernetes is an abstraction. It’s just a way of organizing your infrastructure and making it accessible to the people that need to consume it.

“And I think it’s a fundamentally better abstraction than we have access to today. It has some very nice properties. It is pretty consistent in every environment that you might want to operate, so it really makes your on-prem software feel like it’s operating in the public cloud,” he explained.

Simplifying a complex world

One of the reasons Kubernetes and cloud-native technologies are gaining in popularity is because the technology allows companies to think about hardware differently. There is a big difference between virtual machines and containers, says Joe Fernandes, VP of product for Red Hat cloud platform.

“Sometimes people conflate containers as another form of virtualization, but with virtualization, you’re virtualizing hardware, and the virtual machines that you’re creating are like an actual machine with its own operating system. With containers, you’re virtualizing the process,” he said.

He said that this means it’s not coupled with the hardware. The only thing it needs to worry about is making sure it can run Linux, and Linux runs everywhere, which explains how containers make it easier to manage across different types of infrastructure. “It’s more efficient, more affordable, and ultimately, cloud-native allows folks to drive more automation,” he said.

Bringing it into the enterprise

Photo: Ron Miller/TechCrunch

It’s one thing to convince early adopters to change the way they work, but as this technology enters the mainstream. Gabe Monroy, partner program manager at Microsoft says to carry this technology to the next level, we have to change the way we talk about it.


By Ron Miller

The mainframe business is alive and well, as IBM announces new Z15

It’s easy to think about mainframes as some technology dinosaur, but the fact is these machines remain a key component of many large organization’s computing strategies. Today, IBM announced the latest in their line of mainframe computers, the Z15.

For starters, as you would probably expect, these are big and powerful machines capable of handling enormous workloads. For example, this baby can process up to 1 trillion web transactions a day and handle 2.4 million Docker containers, while offering unparalleled security to go with that performance. This includes the ability to encrypt data once, and it stays encrypted, even when it leaves the system, a huge advantage for companies with a hybrid strategy.

Speaking of which, you may recall that IBM bought Red Hat last year for $34 billion. That deal closed in July and the companies have been working to incorporate Red Hat technology across the IBM business including the z line of mainframes.

IBM announced last month that it was making OpenShift, Red Hat’s Kubernetes-based cloud-native tools, available on the mainframe running Linux. This should enable developers, who have been working on OpenShift on other systems to move seamlessly to the mainframe without special training.

IBM sees the mainframe as a bridge for hybrid computing environments, offering a highly secure place for data that when combined with Red Hat’s tools, can enable companies to have a single control plane for applications and data wherever it lives.

While it could be tough to justify the cost of these machines in the age of cloud computing, Ray Wang, founder and principal analyst at Constellation Research, says it could be more cost-effective than the cloud for certain customers. “If you are a new customer, and currently in the cloud and develop on Linux, then in the long run the economics are there to be cheaper than public cloud if you have a lot of IO, and need to get to a high degree of encryption and security” he said.

He added, “The main point is that if you are worried about being held hostage by public cloud vendors on pricing, in the long run the Z is a cost-effective and secure option for owning compute power and working in a multi-cloud, hybrid cloud world.”

Companies like airlines and financial services companies continue to use mainframes, and while they need the power these massive machines provide, they need to do so in a more modern context. The z15 is designed to provide that link to the future, while giving these companies the power they need.


By Ron Miller