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Speeches

Ginni Rometty, Chairman, President and CEO, IBM

 

Mobile World Congress 2014

Barcelona, Spain
February 26, 2014

Thank you. I’m honored to be here, excited to share perspectives with all of you on some important developments in my industry, and what they mean to your industries.

The phenomenon of mobility is truly cross-industry—nowhere more evident than here at MWC: telcos, device makers, automobile companies, logistics, manufacturing, government agencies and more.

It’s an exciting time for all of us—and a disruptive time for all of us.

I will talk about what we’ve learned as we’ve helped clients all around the world as they embrace mobile. It’s about transforming business models, with mobile as a forcing function. We’ve had more than 6,000 enterprise mobile engagements, creating industry-specific strategies for data, applications, customer experience and security around the world:

What have we learned? Where do we think this is going?

In order to understand that, we need to see it in context. Three historic shifts are underway that are transforming technology and global business:

Let me describe these… and then tell you how I see their implications for mobility, broadly understood.

Every discussion today about changes in technology, business and society must begin with data.

In its exponentially increasing volume, velocity and variety, data is the phenomenon of our time—a new natural resource that is fueling vast economic growth and societal progress. It promises to be for the 21st century what steam power was for the 18th, electricity for the 19th and hydrocarbons for the 20th.

This is what we mean by enterprises, institutions and our planet becoming smarter.

Big Data:

It’s also various—it’s coming from multiple, diverse sources. 80% “unstructured”—from images and audio… to the impulses emitted by billions of RFID tags and all those sensors… to the waves of people blogging, texting, posting and tweeting… to the vast ocean of contextual data surrounding every event, every object, every location, at every moment.

Across all industries, leaders are recognizing that data is the key to competitive advantage. Three out of four businesses I visit already have a big data program in place or are piloting one.

This is why IBM has invested heavily in Big Data and analytics over the past five years.

What do enterprises and institutions need in order to capture this advantage? The key: apply a range of analytics to multiple data sources.

We recently studied 200+ companies—how they use data and analytics.

The best performers take advantage of multiple data sources—across structured and unstructured.

They also apply a range of analytics: Starting with descriptive analytics. As they seek deeper value, adopt predictive and prescriptive. This becomes especially important as the imperative of speed increases. In the world we’re moving into, battles will be won and lost in micro-seconds.

The results are striking. These leading companies are:

What is “cloud computing”? Put aside the hype, actually quite simple: Delivery of IT and business processes as digital services.

The world’s businesses, as they deploy mobile and social—and capture more and more data—are contributing to enormous growth in cloud.

Businesses face three key design choices in their adoption of cloud-driven business models:

IBM has an unmatched array of more than 100 Software-as-a-Service (SaaS) offerings. IBM’s SaaS offerings today support 24 of the top 25 companies in the Fortune 500.

A new culture is emerging today, made up of people who are empowered by knowledge… who are enriched by networks… and who expect value in exchange for their information. And they will only engage with companies and institutions they trust.

In order to respond to these new expectations, businesses are looking to engage in very new ways. You can’t do it ad hoc. You need a systematic approach to engagement:

The stakes are high: One study estimates that there’s $1 trillion of retail revenue growth at stake in online retail, depending on trust in how personal information will be used. According to this study, global online retail could grow from its current level of $1 trillion to $2.5 trillion by 2016 with enhanced trust… or only to $1.5 trillion if trust were to be eroded.

This is why we are enabling social, mobile and security for the enterprise.

We launched IBM MobileFirst in 2013, and have made eight acquisitions to advance our mobile initiatives.

Clearly, mobility is an important point of engagement—but that’s not all it is. When you look at these three historic shifts together, three broad implications for your world—and mine—pop out for me.

First, Mobile is about secure transactions—transactions broadly defined: commerce, payments, healthcare delivery, government services, work flows, maintenance, supply chains. Therefore, the mobile device, whether carried by a human or machine-to-machine, must be integrated with back-end systems, and must have all of the enterprise-class qualities we expect in any other secure transaction.

We all understand the ubiquity of mobile devices. But we must also appreciate the expectations that come from a "mobile first" world. Mobile is literally becoming extensions of people—and of our brands. People are relying on mobile for how they shop, bank and work. It's where they curate their lives and maintain their personal relationships.

What a great responsibility we bear. We must ensure that this new medium for life and business is trusted, secure, reliable, and available.

Consider the experience of the Ministry of Rail in China. They launched a mobile app for travelers to book train tickets via smartphones. For Lunar New Year, the world’s largest annual human migration, this app served 235 million people. On day one, 500,000 users downloaded, performed 100 million transactions.

Second, Mobile + Cloud is redefining the software development environment. I hear from many, many enterprises the mantra "mobile first, cloud first." (Indeed, that is the edict within my own company.) Mobile and cloud are hand in glove.

At IBM, we are remaking enterprise IT for the cloud. This means cloud that extends the enterprise, that integrates with the enterprise, is part of it. For software developers, this is about more than "building mobile apps."

Earlier this week, we began the rollout of a whole set of capabilities that will help the world’s 18 million developers of enterprise applications embrace cloud -- the APIs, composable services, open tooling that they expect in a public cloud environment… plus enterprise-class integration, data and connection services.

We are organizing these tools and services with patterns and recommended techniques for enterprise use cases—e.g., mobile banking that allows an app to reliably and repeatedly access account information sitting up on enterprise systems and then execute the secure transaction.

And we shouldn't limit our thinking to "apps." For years IBM has been talking to you about Smarter Planet—a world that is becoming instrumented, interconnected and intelligent. From the standpoint of software development, we have essentially been saying that more and more of the world is becoming "software defined"—software-defined power grids, software-defined transportation systems and supply chains and healthcare systems. It is no longer weird to think of cars as truly mobile "devices"—connected, software-defined, infused with data.

This all about enabling and equipping the world's corporate developers to build for a mobile-first, cloud-first world… a world of open Platform-as-a-service… with enterprise-grade integration of data and applications. Where, for example, mobile banking can be repeatable and secure.

This is one reason we have just acquired Cloudant—a Database-as-a service provider.

Third, a 'system of engagement' with mobile at the center will require two things. It’s about culture and analytics.

The agile, "dev/ops" culture will move from the software development lab to the front office. That will be required of sales and marketing, customer service, HR, product development. If you engage “mobile first” with your customers, employees, students, patients, citizens… they will expect you to behave differently. Rapid response, iterative, fast with quality. It is a rare front office today that is ready for this.

Analytics will be the only way to understand, predict and prescribe -- whether it's a next best action for a consumer... or a doctor and police officer... or the next best action for a car or a power grid. Analytics applied to Big Data sets is the only way for us to meet the expectations of people: personalized, customized, anticipatory.

Put it all together… Mobile is about secure transactions. Mobile redefines development. Mobile puts a premium on culture and analytics… and you see a new world emerging—a profoundly different way to do commerce… to do healthcare… to run cities. Sometimes it is human-to-human… sometimes machine-to-machine… sometimes both.

As promising as this new world is, it presents my industry with not just an enormous opportunity… but also a daunting challenge.

You see, a world of Big Data renders traditional computing models obsolete. You simply can't write programs fast enough to keep up with the volume, velocity and variety of data being generated today. Not only that… traditional systems can’t deliver answers and value the way people now expect.

Fortunately, a revolution in computing—systems that we call “cognitive”—is arriving… just in the nick of time.

Unlike the computing model we’ve all known for the past 50 years, cognitive systems are not programmed… they learn. And we engage with them in very different, much more collaborative ways.

Three years ago, you may remember that an IBM system called Watson defeated the two all-time champions on the television quiz show Jeopardy! Since then, we haven’t been programming Watson… we’ve been training it—in medicine, finance, retail and other areas. It is absorbing the expertise of the world’s greatest cancer specialists, finance experts… even stellar customer service agents.

But rather than describe Watson, let me show you.

[Video]

Watson is at once able to outperform previous supercomputers in the scale and diversity of data it can analyze… and on the other hand can engage with us as individual human beings in a way that goes far beyond what we’ve ever known from technology.

Last month, the era of cognitive computing took another major step forward, with the creation of our new Watson Group, backed by a $1 billion investment and 2,000 professionals.

We are moving ahead aggressively—but not most importantly to launch a new product. We see this as the dawn of a new era, and we are approaching it as such. We are opening up Watson to a rapidly growing ecosystem of content providers, ISVs and clients who are beginning to build businesses on top of it.

Today, we are taking that ecosystem one step further. I am happy to announce the Watson Mobile Developer Challenge—to encourage the expanding Watson ecosystem to go mobile, bringing the transformative power of Watson to individuals: A multi-phase, three-month challenge that will result in the announcement of three winners.

IBM will provide Watson expertise, design support from IBM Interactive, and seed funding to help the three winning teams develop commercialized apps and bring them to market.

Thank you.


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