Announcing his optimism about the impact of enterprise technology in bad times as well as in good times, IBM’s Arvind Krishna revealed the opportunistic vision of the unicorn startup as a way to transform IBM into a fast-paced innovation machine. His three-year effort continues to win hearts. , minds, and wallets of customers.
With cloud revenue growing 20% to $22.2 billion over the past 12 months, IBM clearly has a large presence in the enterprise cloud. But by the time Krishna took over as CEO in April 2020, IBM’s cloud business was more diffuse than strategic, and its anemic growth rates were clear signs that clients weren’t convinced. That IBM is the cloud horse on which to bet the future of their companies.
But over the past 33 months, Krishna has spun off peripheral and/or low-growth businesses, simplified how the IBM sales org deals with clients, and refocused the 112-year-old company on two growing businesses. What’s Faster on Categories: Hybrid Cloud and AI
It’s also clear that Krishna — the first IBM CEO to rise through the ranks of technologists rather than sales — is also looking just over the horizon and beyond the hybrid cloud and AI to the incredible potential of quantum computing. , but doing so is relatively rare. Key fashion to avoid reducing concentration on the company’s two core competencies.
“It’s simple: I want us to focus on AI and hybrid cloud — those are the two vectors — and then quantum down the road,” Krishna said in a video interview in late December, which you can watch in full here.
“But what does AI and hybrid cloud mean in business terms? We want to leverage data and the cloud for AI for automation, AI for cybersecurity, and computing for sustainability.
“So it’s really about leveraging those two vectors, and building a lot of industry domain knowledge through us. [IBM Consulting] consultants, and then leveraging our partners again and again because I think that’s how you scale the business,” Krishna says, guiding a much more ambitious prospect.
“And that’s how you help measure the planet. How we can feed more people and reduce food waste. I’m no expert on this, but I have some friends and They tell me that up to 40% of food is wasted.
“And I believe we can apply AI and computation to help improve them. [food-industry supply] Along with the chains,” said Krishna.
Prior to his promotion to CEO, Krishna’s leadership of IBM’s technology and product development positions him to position IBM as a leader in the development of quantum computing. And while commercial applications are still a ways off, the prospect of what’s possible in the future will color Krishna’s overall view of IBM’s growing importance to its clients.
“I’m really optimistic about the role of enterprise technology. Now, obviously, we have a lot of headlines in the world: we have inflation, interest rates, we have war, we have other geopolitics, we have There are supply chain issues, cyber security, and labor demographics,” Krishna said.
“But I can tell you that technology is actually a destructive force against all of these forces.” As evidence, he presented a few examples.
Automation makes up for the lack of labor.
“So actually, I think we’re going to have a shortage of skilled people, even with all the other strengths,” Krishna said.
“Now in front of him, you say, ‘Oh my God, am I just going to have low unemployment and high wages forever?’ And my answer is no because that’s where the equation changes with technology. Look at the Veterans Administration: They’re working with us so they need fewer people but they can get veterans benefits and pensions faster.
“McDonald’s and other quick-service restaurants are talking about how hourly wages go from $10 to $12 to $15 to $20, maybe too much to automate the drive-thru process,” Krishna said. C technology,” Krishna said, “and that means more employees can focus on cooking instead of taking orders.
This example of order-taking has broader implications than food preparation because it can serve as a proxy for many different types of workforce in which businesses are able to move their employees into higher-value positions. Deploying automation to create greater customer impact. Experiments
But then Krishna really blew my mind when he described the ways in which hyperautomation—the fusion of AI plus automation—could massively improve cybersecurity.
“We’re on websites for a lot of sporting events, and they’re not transactional sites — you’re looking at the results, you’re looking at the players, and I wouldn’t have thought that these guys were doing a bad job. There are big goals for .
“But a golf tournament has 40 million cyberattacks in one weekend, which is kind of ridiculous. So you can use AI to make a security analyst 50 to 100 times more productive than without AI. “You can,” said Krishna.
“So I’m optimistic that all of these things will help companies be more productive, help people be more productive, and all of those things are going to happen along the way.”
When I asked Krishna if I heard him correctly – he could be a cyber security analyst. 50X More productive, not just 50% more productive—he confirmed it and gave some examples. You can watch his fascinating breakdown of the impact of AI by watching our full video interview, which is live now.
Krishna also touched on some of the development work that IBM is doing with CVS as it evolves from a retailer to a healthcare provider.
How do you deliver 40 million vaccines?
“CVS came to us about two years ago and said they wanted to be one of the largest providers of the COVID vaccine — and I think they turned out to be the largest. So we asked them thought they could vaccinate, and they started talking about whether it could be 10 million, 20 million, or even 40 million,” Krishna recalled.
“So then we asked, ‘How do you handle all these questions that people will have: ‘Can I schedule my appointment? I have this condition, can’t you schedule me? Should? What’s my insurance?’
“They’re reasonably complex, not super difficult, but reasonably complex things. If you think about a call center to handle all of that, you’re talking about 10,000 people! And you “You can imagine what happened in the first few weeks and months, right? Instead, you can do it with a few hundred people and really have artificial intelligence handle those workloads,” Krishna said. .
“So that’s why I talk about how these can be 10X or 20X” leaps in productivity.
Noting that he expects the economic downturn to be “short and short rather than long and deep”, Krishna touched on the power of modern digital technology to drive growth for businesses in a highly competitive market.
In his conversations with CEOs around the world, Krishna said, the term “digital transformation,” while overused, has evolved to represent a revenue-enhancing strategy.
“Can you scale your company, meaning get more clients? Can you go more places in the world and improve customer satisfaction without adding labor costs and all those associated overheads?” Can use technology?
“This is what you should get from digital transformation,” said Krishna.
“If I explain it to a CEO who’s thinking that he doesn’t want to invest during a downturn, they start thinking, ‘Wait, that means I’m going to overscale. Can, and I can do more without putting in. At a higher linear cost on the labor side.
The specifics vary by industry, but Krishna was adamant that every sector has immense opportunities to grow and increase efficiency through digital technology.
“In an airline, can I automate more operations around crew work, around aircraft maintenance, maybe around rebooking? Maybe there’s a hurricane or something. thing and suddenly you lose your connection — well, why not automate it instead of standing in line or calling a call center, because that still requires people on the other end?
“And by the way, computers like to communicate, so they can give you not one, but five choices,” Krishna said.
“So it’s an automated drive-thru at McDonald’s, or having artificial intelligence help you schedule your doctor’s appointment, or using enterprise processes to cut your pension claim time from 10 days to 2. Is.
“These are all examples that we can take advantage of and use, and that’s why I’m optimistic about this going forward, not pessimistic.”
Purpose and profit
Another topic Krishna was keen to dive into is his belief that sustainability initiatives can serve dual purposes. And profitability, and that business leaders need to think about these outcomes as complementary rather than mutually exclusive.
“I absolutely believe that purpose and profit go hand in hand – they are not at all contradictory,” he said.
“You start to look at empty truck miles, you start to look at freight logistics, you start to go around the world and I believe we can achieve a 30 percent reduction through optimization, or we Can use the word sustainable.” Citing examples from smart buildings to increased regulation around energy production and use in Europe to the larger issue of using digital technology more aggressively, Krishna’s optimism is once again good as well as good. A combination of previously divergent goals emerged.
“Let’s get rid of the friction and the physical process – that’s a huge amount we can go after. And anyway, there’s money to be made and all that. But that’s why I say that purpose and profit go hand in hand.” ,” They said.
IBM’s potential feeds that optimism
As we wrapped up, Krishna hinted at quantum’s impact “down the road” but emphasized that IBM’s two biggest areas of focus are the big opportunities around AI and the hybrid cloud.
“I keep coming back to what does AI and hybrid cloud mean from a business perspective? At IBM, we want to apply AI to automation and AI to cybersecurity. I’ve talked about leveraging data and the cloud. Talked because that’s how you can account for sustainability. So it’s really using those two vectors, building a lot of industry domain knowledge through us. [IBM Consulting] Consultants, leveraging our partners again and again, because I think that’s how you scale the business,” Krishna said.
“But we must also help future-proof the world. And the reason we’re investing in quantum — and we’re not the only ones; there are others — is that I believe quantum computing will deliver another revolution.” Seeing how computing with data can help change the world in even bigger ways.”
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