The Main Scoop, Episode 17: The Hybrid Multicloud Era: From Generative AI, to Sustainability

The Main Scoop, Episode 17: The Hybrid Multicloud Era: From Generative AI, to Sustainability

The term “hybrid cloud” has been around for years now—but how is it still impacting today’s IT ecosystem? In this episode of The Main Scoop™, Barry Baker, COO of IBM Infrastructure, unpacks the term and explores how important trends and advances, like generative AI and sustainability, fit into the future of this hybrid multicloud world with our hosts Daniel Newman and Greg Lotko.

It was a great conversation and one you don’t want to miss. Like what you’ve heard? Check out all our past episodes here, and be sure to subscribe so you never miss an episode of The Main Scoop™ series.

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Greg Lotko: Hey, folks. Welcome to the next episode of The Main Scoop. I’m Greg Lotko. I’m joined today with my co-host, Daniel Newman. Good to see you.

Daniel Newman: It’s good to be back, Greg.

Greg Lotko: Fun conversations. We always have a good time. We kind of go all over the place. Today we’re going to be focusing on hybrid cloud and do we still need a focus? You think back, I don’t know, a few years ago, hybrid cloud was all about are you going to do it on prem? Are you going to do it off prem? Is it multi-cloud? What does it mean? Are we still talking about it? Do we still need to be talking about it?

Daniel Newman: I think we absolutely need to be talking about it. I mean, first and foremost, we’ve kind of had these two schools that I think it finally met in the middle. There was the one school that was everything’s going to the cloud, and I think that has-

Greg Lotko: Public. Public. Yeah.

Daniel Newman: Absolutely. Everything’s going to the public cloud. Thanks, Greg, because no one would’ve known what I meant. Everybody’s going to the public cloud, and clearly the world, every hyperscaler and every infrastructure company, has pretty much agreed now that’s not what’s going to happen. Then there was the other side, kind of we call them the cloud deniers, and there was the people that was like, “Oh, it’s never going to work. It’s not secure. It’s not going to be able to handle our important workloads.” We’ve also seen some meaningful sort of pivots away from that philosophy. Remember, the cloud’s a teenager now. This thing’s nearing two decades so this is not a new thing anymore, but hybrid I think really only in the last two to three years, Greg, has really become understood as the architecture of enterprises and the architecture of business of the future.

Greg Lotko: I kind of agree with that.

Daniel Newman: Kind of.

Greg Lotko: Well, I mean people talk about the cloud being the architecture, and I think that’s loaded, just like the idea of hybrid cloud used to be loaded by meaning public or private and then people would talk, “No, no, no. Hybrid means whether or not you’re going to be multiple service providers or how are you going to do that?” Now when I think about hybrid cloud, it’s really more about your overall workload and all of your IT and how that all connects in. So yes it is about public, yes it’s about private, but cloud has to include how do you interact with all your on-prem or off-prem apps, whether or not they’re using what we might refer to as a specific cloud technology from 10, 15 years ago?

Daniel Newman: Yeah, look, there’s a lot of legacy, there’s a lot of technical debt that lives inside of organizations, there’s a lot of compelling reasons that some workloads should be in the cloud, there’s a lot of reasons from a privacy, data, trust that some workloads need to stay on prem, and I think that’s where I was getting at. Those decisions have largely been agreed upon. Now, over time you’ll see some pendulum swinging.

Greg Lotko: I’d use different words, though. When you started to talk about the other stuff, you talked about legacy, you talked about tech debt, and that kind of gives it a negative connotation. There’s a lot of workloads that are on prem that are very effective, very useful, high value. They might be legacy relative to we think about our forebears or our foundation of where we came from, but there’s real value there that needs to be connected in. Speaking of connecting in, why don’t we connect in and bring in our guest here?

Daniel Newman: Let’s ask the guest. He heard both of us as hosts. I generally am right more than he is. I think it’s really important that we start off there. You’ve heard his take, you’ve heard our take. No, but in all seriousness-

Greg Lotko: You are generally right, but you weren’t on that one. Anyway.

Daniel Newman: Okay, okay. Are you sure? All right.

Greg Lotko: Joining us today we have Barry Baker, COO of IBM Infrastructure. Barry, let’s pull you into the conversation. When you hear or think about hybrid cloud, what does that mean to you?

Barry Baker: I think you’re both right on a number of points.

Daniel Newman: Thank you.

Barry Baker: I would say from our perspective, from my perspective, what I’ve experienced at IBM is hybrid cloud is now becoming and almost kind of maturing. I would say we’ve been talking about hybrid from an IBM perspective for five, six years, but I would say when I talk to clients now what I see that they’ve done is we would start to call it hybrid by default. They almost ended up in this state through entropy or opportunistic things where they have sprawl and they call it hybrid. What we’re pushing towards and what we’re starting to see kind of more clients on the leading edge is to be a lot more intentional. We’re calling it hybrid by design. The key to hybrid by design is actually staring at and starting at the workload. You guys touched on where are the right workloads, where should they live? Legacy I think is another word for workload that works and is providing value.

Greg Lotko: Well, I like… Wait, wait, wait. Legacy is another term for workload that works.

Daniel Newman: That’s what I meant.

Greg Lotko: I like that.

Daniel Newman: That’s what I meant.

Greg Lotko: Then you meant well.

Barry Baker: I think you both are right, but I do think hybrid is here to stay. I think even when we see… Even Microsoft just announced their own silicon. We’re seeing heterogeneous technologies being used. It’s more about how do you orchestrate, how do you balance it, how do you marshal all of that to solving your business challenge in an optimal way that leaves you with optionality and flexibility?

Greg Lotko: Let me test and make sure I got what you said because if I do, I think I’m in byline agreement. I think you talked about kind of the evolution we’ve gone through where everybody thought cloud meant one thing and they started marching to that direction, and when they went in that direction they realized, “Yeah, it does this well but it doesn’t do this, that or the other.” So they ended up fragmented or hybrid as a result of not really starting with the workload. As they’ve gotten to this learnings, they’ve started to think, “Ooh, the way isn’t to just force one direction or another. It’s to start with technologically business-wise what am I trying to do? Where is this optimal to run? What else do I have to have it interact with?” Rather than hybrid by happenstance, it’s hybrid by design and a recognition of the value of all these technologies.

Barry Baker: Correct. Then just tying it in a little bit more specifically from a mainframe perspective and from a legacy perspective, our point of view around that is that’s investment protection. You’ve invested so much in that platform, and the right workload on that platform will outperform that workload running on any other platform, but it’s got to be that right workload so how do we help our clients move that workload? Pieces of the workload can move and live in a public cloud, but that’s not the answer for everything.

Greg Lotko: I feel like it’s more than investment protection. I mean, when you… I think when people say investment protection it’s more about the… Protect becomes don’t lose, whereas I think about it as a continue to harvest and sow and reap the rewards because of the investment you’ve done. It’s more than investment protection, it’s continuing to harvest that value.

Daniel Newman: A really great dividend or a high yield bond kind of thing.

Greg Lotko: Yeah, absolutely. Yeah.

Daniel Newman: But I actually think it’s important when you talk about investment too that you talk about the FinOps aspect. I know IBM’s made some pretty big investments with Apptio recently, but, look, there’s a very big story when it comes to hybrid cloud about economics. I use the word legacy more in the way he described it than I think you ascribed what I was saying, but the point of it is is that there are workloads that are very intensive, they use a lot of compute, they have a lot of data. We know egress, we know costs to run workload. Companies are finding out now that we’re nearly two decades into the cloud that some workloads are really expensive to run in the cloud and that the calculus, as we like to call it, is that it doesn’t actually give you the benefit. Even if there are some other benefits, the mathematics… Companies are… This is something I spend a lot of time talking to CEOs, and the CEOs I talk to are weighing the math more than ever before and they’re finding that prem makes sense in a lot of cases, and that’s leading to the more and more hybrid adoption.

Greg Lotko: Well, as investors or even customers of these companies, we want them to have good, sound fiduciary responsibility. We don’t want them chasing technology because it’s a buzzword. We want them doing things that are going to return value to the company and shareholders.

Barry Baker: Just on the Apptio acquisition, I mean, we get to see over half a trillion dollars of IT spend flowing through that and we get to see how that is being spent. It actually starts to… You pull that back and say, “Well, what do you then do with that?” Well, then what you do with that is you actually start to look at particular workloads and help clients say, “This isn’t the optimal place.”

Greg Lotko: “Here’s the patterns we see.” Yeah.

Barry Baker: “Here’s where you could be going and get a return.”

Daniel Newman: Speaking of kind of technical wonderment, though, I do want to jet us in into the future because one of the interesting inflections around hybrid and hybrid cloud is generative AI. We’re seeing companies talking about private AI and generative, you’re seeing kind of hybrid AI talk, and you’re also seeing some companies just on the other side of the equation going as far as saying, “We’re only going to put our most capable features for generative AI in the public cloud.” Barry, I’d love to get your take on kind of is… Do you see generative AI as a forcing function? Do you think the way well-designed data fabrics and architectures can work that hybrid IT and hybrid cloud can work really well? But even if generative AI ends up being more centralized to public cloud because of how it’s being developed, what are your thoughts on how that’s shaping up?

Barry Baker: What we see is the use of and trying to adopt generative AI is actually going to drive your hybrid strategy even harder, meaning you’re not… A lot of our clients for various reasons, whether it’s security, whether where is the data, that hybrid architecture actually is going to… If you kind of embrace it and say, “Okay, instead of telling me I’m going to put generative AI all here in this one place, no, we’re going to actually be able to enable you to put it where it is most valuable, whether that’s where the data is or where the transaction is.” Hybrid is going to be an accelerator from our perspective.

Greg Lotko: Well, and I like the idea of the data versus the transaction. I mean, at least the customers, the clients out there that I’m talking to, yeah they may want the results or the manifestation to happen in the cloud where the transaction is, but a lot of them are saying, “Hey, I want the keys to the kingdom. I want my core data model, my jewels and my data, to stay on prem. Yeah, I may interact or combine it with data that’s out there and render advice, but…” They want to be protected.

Daniel Newman: Yeah, and I’m talking about a lot of the app companies. What I’m talking about is companies like Microsoft and Salesforce that are genuinely making certain features more available and accessible immediately in the public cloud domain. Having said that, what IBM’s doing with watsonx is a good example. I’ve spent a lot of time with the team looking at that and its integrations with Red Hat and how that’s really enabling that multi-cloud data environment for models to be built using edge, prime, public cloud, and obviously private cloud data to deliver generative. So I think it’s very achievable. I actually think it’s more of the gamification, and I think people out there need to pay attention to the fact that some companies are trying to push it because it’s to their benefit to make the workload available in the public cloud, but if you understand the economics-

Greg Lotko: Well, they want access to that data, they want to control the ingress and the egress, and it really… It shouldn’t be designed by your-

Daniel Newman: But we’re not using your data, Greg.

Greg Lotko: No, no, no. The point is it shouldn’t be designed by your app provider. It should be designed by what it is you’re trying to get out of it and how you want to protect them.

Daniel Newman: It’s like the social companies aren’t listening.

Greg Lotko: So it needs the capability. Well, social… No, the social companies are listening, that’s the problem-

Daniel Newman: No, they said they’re not. I believe them.

Greg Lotko: … to everything. To everything.

Daniel Newman: I believe them. It’s really interesting. Another thing I think that hybrid is really driving is the sustainability agendas. In January I’m actually going to be heading to Davos for the first time, and I think one of the biggest conversations that goes on there every year is around climate, around sustainability. Let’s face it, I don’t know if you all heard, but data centers because of the growth of generative AI are going to go from I think 1 to now 2% of all the world’s power is going to be consumed in the data centers. I mean, that might not sound like a lot, but that’s growing. That’s an exponential growth on a one year to one year basis. With everything from cars to edge clouds to more powerful PCs, more compute, more compute, more compute, that’s more electricity, more power. Hybrid cloud has some good economics, which we spent some time on, but it also has some value from a sustainability standpoint as well, right, Barry?

Barry Baker: Yeah. To me, it actually all ends up going back to that workload discussion. From our perspective and what we do with the mainframe and IBM Z is generation after generation we continue to push the limits on how dense you can run that system, how much workload per kilowatt you can get out of the system. For certain workloads, we see a tremendous demand for, “Okay, today I’m running something over here in a distributed environment, scaled out inefficiency from a network perspective. How can we leverage the strengths of the platform from a sustainability perspective to consolidate more and more workloads?” We see a lot of that with LinuxONE, a lot of that with modern databases landing on the technology and driving that agenda from a sustainability perspective.

Greg Lotko: I mean, seriously from a hardware and a software perspective and from a software perspective we focus a lot of our time on the most sustainable, efficient platform on the planet. That’s a really big thing relative to the tie-in to hybrid cloud. Where your data is having a high speed connection to it and interacting and architecting the workload appropriately, you can get that effectiveness and efficiency, you can tie in some of these other models and capabilities, put the right workload where it needs to be connected in effectively through APIs, high speed connects and all that. You manifest yourself then out to your customer base effectively, efficiently, and I mean efficiently meaning very green. That larger machine comparatively that is way more dense on processing and way more effective and efficient software takes up a small corner of that data center and consumes so much less power and you get the best of all worlds.

Daniel Newman: Yeah. From a silicon standpoint too. I mean, you mentioned what they’re doing with Maia and I think Cobalt this week and AWS is a decade now into its own silicon design, and of course every company arm has had a massive rise in visibility. It’s kind of opened up the floodgates to companies building their own ASICs, their own SOCs and designs and compute platforms. If you listen to what it is, a lot of it is the three things we’ve been talking about with hybrid cloud. There’s a very close alignment. It’s performance, which is a big reason you think about hybrid cloud, it’s efficiency and lower power consumption, and it’s economics. The reason you’re seeing it and what I’m saying is as it drives sustainability is in the end, companies are like, “Hey, I need to run this Oracle workload or I need to run this SAP workload or whichever database, whichever ERP.” If we can run it on two or three different versions of silicon instances and one is much lower cost, it’s lower power, and it’s more performant, that’s the way things are going to move. I think that’s really when in the end, I know I’m trying to maybe oversimplify, but that’s the story of hybrid cloud.

Barry Baker: Absolutely.

Greg Lotko: Well, you want the freedom and flexibility to put the workload wherever you want just so that you leave open the opportunities and the choice, but then you do want to comparatively see how they perform, how much energy they consume and all that, and then you make your decisions about the economics versus the performance. Something that doesn’t have to perform fast you might say, “Oh, I’m going to go to a lower cost server or this provider or that.” Something that you need top performance, maybe you’re going to pay a little bit more for that, but it’s really about the whole workflow.

Daniel Newman: Using a database. I think you’re mentioning every one of these things is a different vector. Is that a good database joke? It’s one vector or another, but in the end I think it is and. I mean, we are trying as IT leaders to replace the word or with and. I don’t have to choose performance or low power, right?

Barry Baker: Yeah. I was just meeting with one of the mainframe CIOs, one of our largest clients. I’ve worked on the platform for two decades and I’ve had conversations over those two decades with clients, and by and large it’s always been a, “How do I move off? How do I do this? How do I move to that?” But the and question is now what the conversation is all about. They see Microsoft coming out with silicon and they recognize that, “Okay, there are workloads that I need a full stack approach to.” And they are coming at us now saying, “Tell me what is the best workload for this platform.” That’s the conversation at this point. It’s not a-

Greg Lotko: Well, and part of this is we’ve watched in our careers this pattern play out time after time. With each new technology, it was going to be the panacea and the be all, end all, and none of them ever was. They all had a core strength or something they were strong at. I mean, that’s why they were invented, but they didn’t do everything. I mean, you don’t grab a screwdriver to bang in a nail. You use the right tool for the right job.

Daniel Newman: If they don’t do everything, then you want an option that is hybrid.

Greg Lotko: We’re right back at the beginning.

Daniel Newman: How about them apples?

Greg Lotko: It is all about hybrid. That’s exactly what I was going to say. You can bring us home, but what you see here is we’re all in violent agreement. How about them apples?

Daniel Newman: Yeah, that was a good one. Well, Barry, before we run off because we do have to wrap up here, but just love to get your quick take on kind of what are the big trends that you and the team at IBM are paying attention to moving forward when it comes to hybrid cloud?

Barry Baker: I would actually say let’s talk about generative AI for a second because it’s hybrid but it’s about generative AI in the context of the platform. What we’re working on with watson Code Assistant for IBM Z is essential for where our clients are trying to modernize their applications on the platform. That is capability that can consume and understand hundreds of millions of lines of your COBOL code and then help an application developer figure out how to use it, how to modernize it, potentially even translating it into another language that’s optimized for the platform. From an investment perspective and where our focus is right now, it’s how do we leverage generative AI in the context of hybrid to help our clients modernize on the platform? Huge focus.

Daniel Newman: Well, Barry, I appreciate you taking some time, spending it here with Greg and I.

Barry Baker: Thanks for having me. Yeah.

Daniel Newman: Great conversation, even a little debate.

Greg Lotko: Yeah. A debate that ended up in violent agreement. Good debate.

Daniel Newman: Let’s do it again soon, Barry.

Barry Baker: Thank you. Thanks.

Greg Lotko: Pleasure having you.

Daniel Newman: All right, everybody. You had it here. We talked a little bit about hybrid cloud and once we got over the definition of legacy, we realized that Greg and I did agree on more things than we disagreed on. Now when the cameras come off-

Greg Lotko: We usually do.

Daniel Newman: … I can’t tell you what’s about to happen, but we do appreciate you tuning in because these trends are really important. We are going to see generative AI, sustainability both be things that are going to drive the future here, but what we do know for sure is this hybrid cloud, multi-cloud era is in full effect. But for this show, for The Main Scoop, for Greg Lotko and myself, we’d love you to hit that subscribe button and join us for all the future shows, but we’re going to say goodbye for now. We’ll see you all later.

Greg Lotko: See you next time on The Main Scoop.

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.


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