News & Insights for the AI Journey|Tuesday, November 12, 2019
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Struggling IBM Uses CES to Reinvent Itself 

Source: IBM

Among the featured speakers at the largest consumer electronics show next week in Las Vegas is the CEO of a a major enterprise IT vendor not generally associated with the whizzy world of gadgetry: Ginni Rometty, who also serves as IBM’s chairwoman and president.

Rometty’s keynote at the Consumer Electronics Show (CES) on Tuesday (Jan. 8) illustrates how far the buttoned-down company has shifted its focus as it searches for problems to solve with its AI, cloud and blockchain technologies. Too, it must convince skeptics that its blockbuster—and debt-financed—deal to acquire open-source leader Red Hat (NYSE: RHT) will bear fruit once the $34 billion deal closes.

At CES, Rometty is expected to emphasize IBM’s (NYSE: IBM) undisputed AI chops along with its aggressive moves into the hybrid cloud market and quantum computing. But the underlying theme will be what the company characterizes as “new data,” and using AI and cloud platforms to “refine” data into something useful.

In an interview with CES organizers, Rometty stressed IBM’s goal of combining untapped data with emerging AI and cloud tools. “What many people don’t realize is that only about 20 percent of data today is searchable on the web and accessible by big internet platforms,” Rometty said in an interview with the CES in-house publication.

“The other 80 percent belongs to the world’s large businesses and institutions,” Rometty continued. IBM’s strategy revolves around using its Watson AI tools and its expanding cloud platform in “harnessing that data, learning from it,” the IBM chief added.

The result of meshing all that enterprise data with cloud-based AI tools will be nothing less “exponential learning,” Rometty asserted.

The IBM chief also provided a glimpse of the cloud vendor’s strategy as it seeks to keep pace and gain market share in the bruising public cloud and, increasingly, government cloud markets. Rometty teed up a cloud strategy in her CES interview, arguing that businesses are entering “the second chapter of cloud” adoption.

The first involved moving low-risk business applications to the cloud or renting IT infrastructure. The next step is shifting the other 80 percent of core business applications, then figuring out how to manage them via multi-cloud platforms.

Rometty argued that the Red Hat deal positions IBM to be the top hybrid cloud vendor, and—to avoid vendor lock-in—the most open cloud platform.

Observers note that IBM’s megadeal for Red Hat looks like a make-or-break proposition for an old-line technology company struggling to keep pace with more agile competitors. So far, it’s been a tough sell, with IBM stock drifting lower since it announced the Red Hat acquisition in October.

The fact that Rometty is keynoting a consumer electronics confab illustrates the lengths to which IBM is going to reinvent itself.

About the author: George Leopold

George Leopold has written about science and technology for more than 30 years, focusing on electronics and aerospace technology. He previously served as executive editor of Electronic Engineering Times. Leopold is the author of "Calculated Risk: The Supersonic Life and Times of Gus Grissom" (Purdue University Press, 2016).

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