Remarks as prepared

IBM Think Digital Opening Keynote:
The New Essential Technologies for Business
May 5, 2020


Hello and welcome to Think.  I hope this webcast finds you and your loved ones healthy and safe. I’d like to start by saying that my heart goes out to all of the families dealing with the losses brought on by this pandemic. I know we all have a lot on our minds. So, I’m grateful that so many of you have chosen to spend this time with us.

Certainly, this has been a challenging time for all of us. But, at the same time, it has also been encouraging to see how so many have risen to the occasion. I’ve seen powerful new partnerships between government, academia and the private sector form overnight. I’ve seen a massive mobilization of corporate capability join the fight. And I’ve seen IBMers working around the clock to keep the mission-critical systems of our clients running.

There is no question that this pandemic is a powerful force of disruption and an unprecedented tragedy. But it is also a critical turning point. It’s an opportunity to develop new solutions, new ways of working and new partnerships that will benefit your company and your customers, not just today but for years to come.

The fact that IBM has been here before gives me perspective and confidence. I believe history will look back on this as the moment when the digital transformation of business and society suddenly accelerated. And together, we laid the groundwork for the post-COVID world. So it’s a privilege to lead a company like IBM at a time like this. With that, let’s get to work.   

If you look at the technology landscape today, hybrid cloud and AI are the two dominant forces driving digital transformation. Now as I talk to clients, I see four underlying reasons driving hybrid cloud adoption. I call them the four imperatives of hybrid cloud: the imperative of history, choice, physics and law. Let’s look at them one by one.

First, there’s the imperative of history. As a company, you rarely start from scratch. You have complex workloads and apps. Your messaging, data and transactional systems are often well integrated into your operational and security systems. Hybrid cloud is about meeting you where you’re at in terms of the IT infrastructure choices you’ve made and the various places you do computing—whether it’s in a public cloud, or a private cloud, or on-premises.

Second, there’s the imperative of choice. Relying on one public cloud alone locks you in. And, perhaps more importantly, it locks you into only one company's innovation. Hybrid cloud is about giving you the freedom to host your own software one day, move that same setup to a cloud provider the next or down the road.

Third, there’s the imperative of physics. You simply can’t run a factory floor with robotic arms that require a 50ms response time through the cloud. In many cases, your IT systems need to be physically close to your data and services.

Finally, there’s the imperative of law. Where you are in the world matters. It determines which legal framework you have to comply with. Whether that’s GDPR, the California Consumer Privacy Act in the United States or any other regulation.

These imperatives are based on inescapable realities that are unlikely to change overnight. They suggest that hybrid cloud as a major force in tech is here to stay. Now to help you—our clients—capitalize on the massive opportunity hybrid cloud represents, we’ve made big bold bets.

Most notably, we’ve joined forces with Red Hat to give you the unique ability to build mission-critical applications once and run them anywhere.

With this crisis, the importance of hybrid cloud and AI has not changed. What has changed is the pace at which they are being adopted. Transformation journeys that were going to last a few years are now being compacted into the space of a few weeks or months. Businesses are also questioning and transforming their operating models.

This has both immediate and long-term consequence. They’re thinking about how to use technology to re-assess and re-imagine modes of consumption, supply, interaction and productivity. They’re looking for long-lasting answers on what they can do with technology to address the key issues that COVID-19 has brought to light.

These include: How can supply chains become even more resilient to resist global shocks?

Which workloads should I be moving to the public cloud to keep critical functions up and running? Which IT tasks can I automate to have my workforce focus on higher-value ones?
How can I secure my IT infrastructure to enable remote working? Or, how can I use AI to handle the massive increase in calls coming into my call centers?

If there is anything the COVID-19 pandemic has taught us, it’s the critical importance of technology solutions that enable speed, flexibility, insight and innovation. In fact, choosing which technology platforms power your business is the most consequential decision you can make.

Technology platforms are the basis for competitive advantage in the 21st century. They determine how quickly you can pivot to new market opportunities; how well you serve your clients; how much you can scale. And, how fast you can respond to a crisis like the one we’re facing today.

On that last point, let me give you the example of one of our clients, CLS Systems. CLS Systems is a global financial market infrastructure that settles more than half of the world’s foreign exchange transactions. With COVID-19, we worked very hard with them to ensure that the entire platform could withstand the unprecedented surge in demand. In fact, the platform had to handle an all-time high of more than 3 million transactions processed in a single day.

To give you a sense of how much that is in financial terms: that’s over $13 trillion in value.

Now, I want to introduce a client who understands the importance of using technology to transform the way its business operates better than anyone. Anthem is the largest healthcare provider in the Blue Cross Blue Shield Association in the United States. They have close to 40 million members.

Their long-term goal is to transform their company from a “health insurance” company to a “healthcare provider.” This is part of a digital transformation that has been radically accelerated by COVID-19. To help us understand more, I had the pleasure last week of talking to Rajeev Ronanki, senior vice president and chief digital officer for Anthem. Like me, I’m sure you will enjoy hearing his perspective in this video.

(Video / Conversation between Arvind Krishna, CEO, IBM and Rajeev Ronanki, SVP and CDO, Anthem).

It’s a privilege to partner with such innovative clients as Anthem. As you’ve all seen in our discussion, the journey Anthem is on to go from reactive to proactive, predictive, and personalized care is fascinating. In fact, I believe that Anthem is setting out a powerful example for the industry to follow.

Now, I will not pretend to know what will happen in the future. But I do know what IBM is committed to going forward. Our commitments to our clients is that: We will continue to apply and deepen our understanding of the unique needs of your industry. Your regulatory requirements. Your security posture. But also, the opportunities you need to seize to transform how you deliver value to clients.

We will further our leadership in good tech, developing and deploying technology solutions you and your customers can trust. We will foster a more entrepreneurial culture, to move faster, and to continue to make it easier to work with us. And finally, we will be client-obsessed, listening closely to your needs, and preparing you for an uncertain future by supporting your journeys to hybrid cloud and AI.

To that end, we’re making a series of major announcements at THINK that will make good on these commitments.

On AI, I’m extremely thrilled to share with you the launch of “AI for IT.” AI for IT are capabilities that give every CIO the ability to automate their IT infrastructures to immediately reduce cost and to be more resilient. A key part of this is a product called Watson AIOps. Watson AIOps relies on AI to automate how enterprises self-detect, diagnose and respond to IT anomalies in real time.

Unforeseen IT incidents and outages can cost businesses in both revenue and reputation. The problem is that many businesses are consumed with fixing problems after they occur, instead of preventing them before they happen. Watson AIOps aims to tackle this challenge.

What’s more, Watson AIOps is built on the latest release of Red Hat OpenShift. It can run across any hybrid cloud environment. It also works with technologies at the center of today’s distributed work environment, including Slack and Box. I strongly believe that AI can play a critical role in assisting clients during this uncertain time. And, AI for IT is the perfect illustration of that.

To delve deeper into what the powerful role AI for IT can play for your business, let me show this brief video. Rob Thomas, our SVP of IBM Cloud and Data Platform, had the opportunity to discuss the launch of Watson AIOps with the CEO of Box, Aaron Levie, and the CEO of Slack, Steward Butterfield.

(Video / conversation between Rob Thomas, SVP of IBM Cloud and Data Platform, IBM, Aaron Levie, the CEO of Box, and Steward Butterfield, the CEO of Slack)

More than 20 years ago, experts predicted that every company would become an Internet company. Now we’re predicting that every company will become an AI company. Not because they can, but because they must. As you heard in this video, AI is the only way to scale innovation, insight and expertise.

Now let me move to cloud, where I’m also excited to share with you two important announcements.

The first announcement relates to the one of the most consequential cloud projects we have launched last year: the financial services-ready public cloud. Before I get into the announcement, let me pause for a moment and tell you a bit about the financial services-ready public cloud. I will tell you what it is and what problems it aims to solve.

Now, it’s no secret that banks operate in a complex environment—perhaps like no other. Think of all the problems banks have to tackle as they move more workloads to the cloud. Security. Governance. Data protection. Resiliency. Privacy. Then compliance with 20 or so regulatory bodies and thousands of compliance checks to perform. To say that they live in a constrained environment is really an understatement.

Add to that all the other external forces like the swift rise of fintech, which has deeply changed customer habits, norms and expectations. Then, you’ll start to get a sense of the immense pressure banks have to deal with. To address these issues, we launched the financial services-ready cloud.

To reinforce this, IBM is launching a new program for Independent Software Vendors (ISVs) and Software-as-a-Service (SaaS) providers. The program is designed to help them demonstrate that they have met the stringent security, resiliency and compliance requirements of IBM’s financial services-ready public cloud. We’re excited about the value they will bring to customers.

Second, today, we are unveiling a tech preview of IBM Cloud Satellite. IBM Cloud Satellite extends IBM Cloud services anywhere a client needs them, delivered as-a-service on-premises or at the edge. Clients can increase their business agility by automating deployment and management of cloud native services across all of their computing environments—for both development and operations. What this means is that with IBM Cloud Satellite our clients can run workloads where it makes the most sense. 

Unlike other public clouds, IBM Cloud is explicitly architected with an open source Kubernetes foundation for greater portability to IBM Cloud Satellites. Clients can access a rich catalog of cloud services. They can provision API-driven cloud services with the click of a button, deployed to any environment and operated as-a-service with the built-in expertise of IBM. IBM Cloud Satellite also simplifies service visibility and control and gives you access to a single dashboard, common identity and access management, and centralized observability across all your IBM Cloud Satellites.

Finally, I’ll share one last announcement we’re making today around 5G and edge computing.

With 5G and edge computing, businesses can bring computation and data storage closer to where data is created and makes it easier to act on the insights it generates. This creates massive opportunities for new products, platforms and experiences in virtually every industry.

That said, with computing done in so many places—on public and private clouds and now increasingly on the edge—the challenge for businesses is to connect all of the different elements into a cohesive platform that enables agility and rapid delivery of new features and services.

Businesses need capabilities that allow them to globally deploy features, functions and security patches consistently everywhere computing is done.

And, they need to apply increased levels of automation to help make it all efficient, scalable and secured. After all, the world is becoming software-defined and both consumers and business customers now expect that the products they use will continuously get better over time.

To help businesses and telcos deal with these challenges we’re announcing new services and capabilities. The new edge and telco network cloud solutions are built on Red Hat Open Stack and Red Hat OpenShift, and enable clients to run workloads anywhere—from any data center to multiple clouds to the edge. We’re confident that these new capabilities will help businesses capitalize on the opportunity that 5G and edge computing represent.

Let’s hear a little more about this work in the following video. Paul Cormier, the CEO of Red Hat, had an interesting discussion with Srini Kalapala, the Vice President of Technology and Supplier Strategy for Verizon. 

(Video / Conversation of Paul Cormier, CEO of Red Hat, and Srini Kalapala, Vice President of Technology and Supplier Strategy at Verizon)

The 5G and edge computing generation is coming quickly, and it is poised to have as much impact on enterprise computing as mobile phones did for consumers. Seizing on the opportunity of 5G and edge computing, however, means making important architectural choices now. And, as we move into this new era of computing, we fundamentally believe that winners in the 5G and edge era will be those who embrace a hybrid cloud approach based on open technologies and standards.

In conclusion, we’re truly excited about these announcements.

AI, Cloud, and 5G are among the most powerful, core technologies our clients use to transform how their business operates. To these, we can add blockchain and quantum, which also have a critical role to play in the digital platforms of the future.

Of course, the future does not depend on technology alone. It depends on people. Going forward, we are going to compete on trust. On values. And on our responsibility to the wider community of people whose lives we touch.

IBM has long embraced a corporate philosophy that prioritizes stakeholders, not just shareholders. Inspired by this commitment, we’ll also continue to model the industry standard for what good tech looks like, with initiatives like Call for Code.

For those of you don’t know, Call for Code is our global call to action for developers to apply their skills to solutions for disaster preparedness and relief. This year’s competition is focused on the challenges of climate change and COVID-19.

Given the urgency of these issues, we created accelerated tracks for developer solutions for each. We’ll announce the initial top three winning entries during this Think event and partner with those teams to speed their innovations into the field.

We’re also keeping the COVID-19 Call for Code search open through July to encourage continued innovation. So, if you’re a developer, please join us by going to callforcode.org and lend your expertise to the cause.

As difficult as these times may be, we at IBM see plenty of light at the end of the tunnel. Today, as we deal this global public health crisis, IBM continues to be an important player, not a spectator.

I’ll close with a few words of thanks to our clients for your business and trust as we navigate this unprecedented crisis together. I want you to know that we are carefully thinking about how and when we all return to the workplace. One thing is for sure: we need to do this in a consistent manner.

This conference is designed to help you. To accelerate your path to digital transformation. And to enhance the basis of your competitive advantage and growth for the better days ahead. I’m confident we will benefit greatly from this time together. And I know that, with your continued faith in IBM, we will emerge from these challenging times stronger than ever.

Thank you.