IBM recently concluded its first IBM THINK conference in Las Vegas. In THINK, IBM combined several former events into one comprehensive conference that covered the breadth and depth of the entire corporation. Although the 40,000 some attendees could explore in depth particular products or services in a plethora of educational sessions or at the huge exhibition hall, in a sense THINK was a coming out party that showed how IBM is reinventing itself in what is called the “data-driven” era.

What turns the future into the era of data? The Economist has stated that the most valuable resource is no longer oil, but data, and supported this mammoth assertion in a seminal May6, 2017 article entitled “Data is giving rise to a new economy.” https://www.economist.com/news/briefing/21721634-how-it-shaping-up-data-giving-rise-new-economy

Therefore, both IBM and the Economist are responding to broader business and societal events.

Chairman’s Address

Ginni Rometty, IBM’s Chairman, President, and CEO, gave the overarching keynote presentation “Putting Smart to Work” in the Mandalay Bay Events Center to a more-than packed house (12,000 capacity).

She pointed out that business has been impacted by rapidly scaling technologies. The first example she cited was Moore’s Law that has led to an exponential growth in computing power for the last 50 years. The second was Metcalfe’s Law which explains the rationale for the exponential growth of networking. Rometty then proposed that there needs to be a new law for the data-driven era where exponential learning is built into every process. Since this is related to the rise of artificial intelligence (AI) she suggested that the new law be called “Watson’s Law” (after IBM’s Watson platform).

We recall that Moore’s Law (named after Intel co-founder Gordon Moore) says that integrated transistor density doubles roughly every two years. As Moore himself started last year, this concept is running out of steam due to limits imposed by the laws of physics and economic concerns.

Now, Metcalfe’s law (named after Robert Metcalfe, although George Gilder should also be recognized) states that the effect of a telecommunications network is proportional to the square of the number of connected users of the system. This networks effects exponential scaling law is still robust, vibrant, and growing. In fact, Rometty’s guest later in her keynote, Lowell C. McAdam, Chairman and CEO, Verizon Communications, asserted that 5G (for fifth generation wireless systems) will usher in a 4th industrial revolution.

The cherry on top is the third law which relates to the exponential scaling of learning and knowledge through the use of AI. Rometty’s proposed name of Watson for this law may not be acceptable to competitors (although if it seen as generic rather than tied to IBM it might not have a real problem). It is a lot simpler to use though than naming the law in honor of one of the AI pioneers, since Watson is more widely known than pioneers, like Edward Feigenbaum and Marvin Minsky.

Rometty also pushed the idea that business, society and IBM itself all have to be reinvented in the wake of the third law on top to the first two laws.

  • Business — organizations will need to learn exponentially; every process will be affected by having learning put into it; the result will be man and machine working together, not machines simply replacing human workers.
  • Society — 100% of jobs will change; among other things, this will result in the need for midcareer retraining.
  • IBM — the company needs to continue to deliver trust and security to its customers. In the data-driven era, existing enterprises have collected large amounts of data, so they can be incumbent disruptors in a time of change. In this regard, IBM needs to support them through the use of technologies, such as blockchain and the Watson platform.

The idea of man + machine rather than machine replacing man is a positive one and we can only hope that Rometty is correct. As one of my fellow analysts noted, he would bet the under on the statement of 100% of the jobs will change. Still, while it may be hyperbole, it would be best if all of us continue to examine in more detail what is likely to happen in open and reflective dialogue and analysis.

Now as to incumbent disruption, Clayton Christensen is noted for bringing the concept of innovative disruption to the forefront when the challenge to enterprises was from outside disruptors. However, even though a lot of external datasets have value, enterprises control their own customer and product history information, which they can choose to keep private or share as appropriate with other parties. Thus, innovative disruption should now very well lean toward incumbents doing the disruption. This should play very well into IBM’s wheelhouse as the company’s main focus has always been on dealing with established enterprises.

Modern Infrastructure Reiterate the Chairman’s Theses

In the expo area attached to the THINK conference, IBM divided its technologies into four campuses: modern infrastructure, business and AI, cloud and data, and security and resiliency. As an IT infrastructure analyst, I focused on demoes and presentations in the modern infrastructure campus.

In his presentation “Driven by Data” Ed Walsh, General Manager, IBM Storage & Software Defined Infrastructure, focused on rethinking data infastructure to accelerate innovation and competitiveness in the data-driven, multi-cloud world. His guest, Inderpal Bhandari, IBM’s Global Chief Data Officer, discussed a cognitive enterprise blueprint where in the era of data those who can harness the power of their information assets will have a competitive advantage. As part of the process of reinventing itself, IBM plans to walk the walk and deploy such capabilities as AI and multi-cloud internally. As a case study, the company will start sharing its results perhaps as soon as May of this year.

In his presentation “Storage Innovation to Monetize Your Data,” Eric Herzog, CMO & Vice President, Worldwide Channels IBM Storage and Software Defined Infrastructure, focused on how the company’s broad storage portfolio helps customers today. He illustrated with a number of customer examples. For example, ZE PowerGroup Inc. provides a data and analytics platform that enables its clients to outmaneuver their competitors. Speed is of the essence. With the help of IBM storage solutions, the company was able to increase its client base by 30% while the same time using its costs by 25%.

But a discussion of IBM’s modern infrastructure would not be complete without at least touching upon its new POWER9 processors and related server architecture. In his presentation “Accelerating Your Future with POWER9,” Bob Picciano, Senior Vice President, IBM Cognitive Systems, pointed out that the value of computing is changing from automating and scaling process to scaling knowledge via actionable insight and that requires reinventing computing for cloud and AI workloads.

Speed matters because time matters. IBM claims a breakthrough in machine learning where its POWER-based solutions deliver results 46X faster than Google and 3.5X faster than Intel. So it should come as no surprise that at the OpenPOWER Summit held in parallel with THINK 2018, Google (and OpenPOWER founder) announced that it has deployed its homegrown POWER9-based “Zaius” platform into its datacenters for production workloads.

Reinvention Will Not Change What IBM Does Well Today

Reinvention is the process of changing so that the results often appear to be entirely new. Although IBM is in the process of reinventing itself in many ways, it also needs to preserve the best hard-learned lessons of the past that have relevance now and in the future. Just some of those include:

  • Continue to THINK clearly — Thomas J. Watson introduced the slogan (i.e., tagline) THINK in December 1911 before International Business Machines received its name to emphasize that “we get paid for working with our heads.” Thinking well never grows old and is even more relevant now that broader forms of artificial intelligence are being coupled with human intelligence in a data-driven world. Naming the conference IBM THINK was a positive reinforcement for the values that IBM has long stood for.
  • Continue to invest in the future — IBM builds its capabilities through significant investments in research and development (R&D), as well as external acquisitions. IBM has always spent heavily on the basic R&D that is necessary to prime the well of innovation and so is one of the worthy successors to Ma Bell in creating technology that transforms both our global economy and society. Yet basic research takes years if not decades and may or may not result in success. Firms that fear failure or are interested only in the short-term bottom line are typically unwilling to take the risks that basic R&D entails, but for over 100 years IBM has proven that approach wrong. AI as demonstrated by Watson is simply the latest success story. The company’s quantum computing developments (via its IBM Q system) represent a technology with a world of promise. It is also one where IBM is willing to accept the risks, challenges, uncertainty, expense, and lengthy development process before the technology starts to bear any potential revenue and profitability fruit.
  • Continue to focus on the customer—Maintaining trust and security for customers was a major theme. However, IBM has long been known for its customer support and satisfaction so that focus is simply a continuation (or reinforcement) of that traditions
  • Continue to drive positive relationships — IBM recognizes that it cannot do it all; its support of Open Source technologies, like Linux and Kubernetes, has been very productive. Its far-reaching partnerships from Cisco with VersaStack to a joint venture with Maersk involving blockchain benefit IBM, its partners, and customers alike.

Mesabi musings

The world’s economy and society in general (including how we spend our time interfacing with the outside world) have been greatly impacted by the first two exponential scaling laws — Moore’s law for computing and Metcalfe’s law for network effects. Although those two laws continue to work their magic, further transformations will come about through the third exponential scaling law — the one that reflects the need to exploit learning and knowledge in the data-driven era.

At THINK 2018, IBM CEO Ginni Rometty pointed out that this will impact business (as in a more advanced man-machine interface) and society (in that all jobs will be affected in one way or another). Understanding this, IBM is reinventing itself to continue maintaining its leadership role as a broad-based information technology vendor.

Now, IBM faces strong competitive challenges on all facets of its product and services portfolio. That pressure includes the likes of Dell Technologies in enterprise IT, Intel on the computing side, Google and Amazon on the cloud side, and a whole host of other companies large and small here, there, and everywhere. That has never daunted IBM in the past and it will not in the future. 

The IBM THINK 2018 conference gave IBM the opportunity to showcase its products and services, along with its best and brightest people, and ideas that will enable it to continue to serve customers well now and in the future. That should come as no surprise. After all, thinking is all about using your head for the benefit of all, and that “head” now includes artificial, as well as human intelligence.