ORLANDO Fla.--Back in the "business machine" days when they were making better typewriters, their white-shirt, solid tie "suits" used to drive competitors out of business, the opposite of IBM's business strategy today. According to Ginni Rometty, president and chief executive officer (CEO) of IBM at the Partnership Leadership Conference here, its strategy now is to make as much money as possible for its "partners" by showing them how to leverage IBM's Watson, BlueMix and other hybrid cloud offerings.
"Yesterday I got a call from President Obama asking me to speak before a gathering of world leaders," namely the first U.S.-ASEAN Summit hosted by the United States where Obama expressed a national commitment to a strong and enduring partnership with the 10 nations of Southeast Asian countries represented there. "And I told them the same thing I'm telling you today," Rometty told the over 1500 business partners from 78 countries gathered at IBM' Partnership Leadership Conference. "Partnerships are the future of successful businesses today."
President and chief executive officer (CEO) of IBM Ginni Rometty explains how IBM is depending on its partners for the lion's share of its revenue streams in the future, thanks to Watson and hybrid clouds in the coming cognitive computing era.
(Source: EE Times)
IBM is reinventing its profit stream from big iron and proprietary software and services into partnership revenues gleaned from offering Watson and other verticals as software-as-a-service (SaaS). To accelerate its partners changing business model, IBM is offering free training on how to prevent partners from wasting time reinventing the wheel--by writing their own code--but instead using IBM's proliferating application programmer interfaces (APIs). As partners migrate to the quick writing of apps for their customers with APIs that take advantage of the natural language, deep learning and predictive capabilities of Watson, IBM's revenues grow along with its partners in a symbiotic relationship that encourages worldwide cooperation instead of competition--hence the invitation from Obama to speak to the nations of Southeast Asia.
As to competition, IBM has virtually none addressing the whole package they offer, and it is quickly acquiring those companies that offer unique new takes on SaaS, Watson-like learning, hybrid clouds and most-importantly sources of new data streams.
"We have already acquired 10 to 15 companies trying to compete with us in various areas," Rometty told EE Times in an exclusive interview. "Some have expertise in very narrow areas such as facial recognition, but what could they do with it that by itself? What IBM provides is the ability to actualize these type of cognitive applications."
There most important acquisitions, however, are not of companies sporting new algorithms, but those with rich streams of data, such as The Weather Company, whose CEO came over with the acquisition to become IBM Watson's new general manager (GM), David Kenny. Now Watson has added up-to-date weather forecasts to the capabilities of partners using its APIs.
"Data is the most important commodity today," Rometty told EE Times. "We have to keep feeding Watson more and more data to increase the breadth of its expertise."
IBM's Watson analytics example for one million users in 2500 organizations.
Rometty likened the emerging "cognitive computing era" to the preceding "digital age." It took decades for digital computers to replace most of the previously analog applications--with only a few to go like radio frequency. Rometty predicted that the cognitive computing era would be just as pervasive, but would take over from manual analytic and predictive apps even faster than digital overtook analog.
"The cognitive computing era stands to be the most disruptive and will be the biggest change in technological history," Rometty said.