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Putting Smart to Work Keynote at Think2018 Conference
This week, IBM clients, Business Partners and executives get together for the inaugural IBM [Think 2018] conference. There are over 30,000 attendees.
This is a combination of last year's three events: Edge, InterConnect, and World of Watson (WoW). The combined event is divided into four "campuses":
Cloud and Data -- formerly covered at InterConnect
Modern Infrastructure -- formerly covered at Edge
Business and AI -- formerly covered at World of Watson
Security and Resiliency -- covered in the other three events
(I am not in Las Vegas! In my first post in this series, [Science Slam], I forgot to mention that I was not physically there, and have since been flooded with invitations and requests for one-on-one meetings with clients and cocktail parties. Sorry folks! I am in Tucson writing these blog posts by watching the live stream videos of the event.)
Putting Smart to Work
Ginni Rometty, IBM Chairman, President and CEO, kicked off the event. In the opening video, we realize that "smart" is just a placeholder, translated to "Putting Cloud to Work", "Putting AI to work", and so on.
An "interesting moment" that happens every 25 years, when business and technology change at the same time. Those who learn exponentially are disruptors, not victims of disruption.
[Moore's law]: Double the number of transistors on a chip every 18-24 months.
[Metcalfe's law]: The value of a network is related to the square of the number of nodes involved.
[Watson's law]: Ginni would like to coin this new law to refer to exponential learning from data using Artificial Intelligence (AI).
How much of the world's data is searchable? only about 20 percent. The other 80 percent is proprietary that provides competitive advantage. IBM is helping clients be the "incumbent disruptor".
Ginni covered three inflection points: your business, society, and IBM itself
Companies must go on the offense, leverage multiple digital platforms (plural), and empower people by enable "man+machine" learning in every process they have. What are better decisions worth? Over $2 Trillion US dollars!
Man+Machine better than man-alone and machine-alone. At [Credit Mutuel], a leading European bank, Watson technology is used to answer 60 percent of customer emails, and 95 percent of the employees there are happier about this.
IT technology represents both the greatest opportunity and the biggest issue of our time.
Trust and responsibility. We must be data stewards, with focus on privacy and security. Only 4 percent of data is encrypted.
Jobs and skills. Man+Machine augments man alone. 100 percent of jobs will change. Ginni coined the term "new collar jobs" a few years ago.
Inclusion is important. IBM is one of the leaders in this area with its 400,000 employees spanning all races, genders, and sexual orientations. IBM was awarded [Catalyst award] for companies making real change for women in the workplace. IBM is the only tech company to be ever awarded this, and this will be the fourth time IBM is honored with this award.
IBM has revamped its own HR with [Workday]. In 2016, Workday partnered with IBM on 7-year deal to use IBM Cloud for its platform. IBM in turn has switched its HR to using Workday applications.
Mainframe technologies and POWER9 are now on the IBM Cloud. IBM is also expanding IBM Cloud Private to include "IBM Cloud Private for Data".
To date, IBM has completed 16,000 Watson engagements to-date. Watson Oncology now in 150 hospitals analyzing 13 different types of cancer.
The big system Watson used to play Jeopardy in 2011 have been broken down to micro-services and APIs that are more easily consumable by applications.
IBM and Apple have announced integration with Watson. Apple [CoreML] natively goes to Watson. IBM can now go straight to Apple Swift code. A new "Watson Studio" allows you to develop AI models in the cloud, then deploy them in private on-premises.
IBM will also offer "Watson Assistant". In the past, buying Watson was like buying a puppy, you needed to train it yourself. If you wanted a vicious guard dog, or a seeing-eye dog, that was up to you. Now, IBM offers "Watson Assistant" which is pre-trained.
Secure to the core
IBM is obsessed with security and trust, from Blockchain to Pervasive Encryption.
In the past, IBM often tried to do this all on its own, but in today's business climate, IBM now has strategic partnerships in these many areas.
Lowell McAdam, Chairman and Chief Executive Officer, Verizon Communications was the first guest speaker.
April 2017, Verizon launched Oath, formed from the company’s acquisition of AOL and Yahoo, which houses more than 50 digital and technology brands that together engage more than 1 billion people worldwide.
(I personally have been working with Verizon for decades, back when they were just NyNEX, BellAtlantic, and GTE, before they acquired Vodaphone, MCI, AOL and Yahoo! I use FlickR, one of the Yahoo brands.)
With the acquisition of AOL and Yahoo, Verizon formed "Oath", with over 1.2 billion consumers. The name came from the promise to customers for giving them to get what they want, when they want them.
Largest fiber provider for the USA. We have enough fiber on hand to stretch to Mars.
They invest $18 billion per year, but often payoffs not for another 5 years. [5G Wireless network technology] is an example. Lowell feels that 5G will usher the "fourth" industrial revolution:
Speeds over 1Gbps for consumers, 25Gbps for commercial, compared to 10 Mbps typical today.
5G will support 1,000 more devices per cell site, enabling IoT like intelligent lighting, video surveillance, face recognition.
5G has short latency, 1 msec compared to 200 msec today to cell site and back. This shorter latency will enable Augmented Reality and Virtual Reality (AR/VR).
5G also reduces battery consumption, imagine only charging your cell phone once per month!
Verizon delivers value three ways:
Provide connectivity only. Verizon will continue to do this for some markets
Like IBM, Verizon promises it will not use customer data in any manner that the customer did not "opt in" for. Business is based on trust. Those business that lose trust have difficult time to regain it.
Shipping, Supply Chain and Global Trade
Michael J. White manages the Global Trade Digitization organization for Maersk. He was recently named CEO-designate of the IBM-Maersk Joint Venture.
Shipping products is $4 Trillion US Dollar business. As much as 80 percent of what we consume came over the ocean. On average, 20 percent of the shipping cost is administrative paperwork, however, in some cases, the administrative costs exceed the physical transport costs.
State of industry, over the last 5 years, has been 3.7 percent compound annual growth rate (CAGR). This is expected to increase to 4 percent as economies bounce back. Many companies run lean, expecting their supply chains to provide supplies "just in time".
Unfortunately, shipping is hugely inefficient, paper-based. This impedes growth of local trade. Take for example the shipment of a container of Avocados from Kenya to Netherlands: 30 entities involved, over 100 individuals, over 200 transactions.
Why did IBM-Maersk joint venture pick blockchain? Blockchain is not a solution searching for a problem. The problems are well known, and blockchain addresses them. Smart contracts and decentralized authority provides immutable trust, critical in an industry where many parties do not know each other.
IBM Maersk Joint venture was formed over the past 18 months to create the world's best global trading platform.. There are 25 companies on-boarding now, with another 40 companies have expressed interest to join soon.
Unlike the anonymity of Bitcoin that enables terrorists and murders for hire, IBM is focused on transparency that all parties identify each other.
Blockchain benefits all the key parties involved. Carriers benefit, customers benefit, and ports and terminals get information earlier upstream for better planning during peak periods, and this results in better utilization of resources available.
(Not everyone benefits - counterfeiters and corrupt government officials will not be happy with Blockchain used in this manner!)
Paperless transactions reduces re-keying information by 80 percent. Less re-keying means fewer mistakes, fewer typos.
This new global trade platform offers opportunities in adjacent blockchain networks for financial services, insurance, and food safety. To ensure food safety, Blockchain is used by Walmart, Kroger, Unilever and 20 others. One third of food grown is wasted.
Dave McKay, President & Chief Executive Officer, Royal Bank of Canada (RBC) was the next speaker. Dave graduated from the University of Waterloo, a COBOL computer programmer at heart. RBC still use COBOL programs in their banking applications!
RBC is the top bank in Canada, and would be #5 bank if it was based in the USA. It will be celebrating its upcoming 150th anniversary in 2019. Highest customer sat for multiple years running. RBC has 13 million customers. RBC is also Canada's #1 broker/dealer for investment banking.
Back in the 1980s, banks were only open 10am-3pm, and treated it as a privilege for clients to work with the bank. Account holders came in several times per week, and relationships were built with local branches. Today, account holders are not coming into branch offices, using ATMs and mobile phones instead.
In the past, consumers used their RBC Credit Cards, and this provided brand recognition for RBC. Today, traditional banking services are now being embedded into other value chains. With Apple Wallet, for example, you enter your RBC credit card once, and then nobody knows what bank you are using to pay for coffee.
Like any bank, RBC is focused on three areas: moving money, storing money, and lending money. AI is needed to evaluate these transactions into knowledge, to provide business value and insight. However, RBC has only 40 Applied and Pure data science researchers on staff. This was deemed not enough, so RBC partnered with IBM.
Cloud, the computer power and speed needed, RBC has 60 apps in development in the IBM Cloud. While silicon valley start-ups might "let the app fail faster in the hands of clients", that approach doesn't work with money transactions.
RBC has invested heavily in blockchain. It will transform how we work with others. Digital transformation not just technology, but also cultural change. Is RBC in the mortgage business or the "Housing enablement business"? Is it in the car loan business or "transportation enablement business"?
Working with small business, they want to focus on their own clients, not bookkeeping and accounting. RBC has deployed AI in the Cloud to create the Advisor's Virtual Assistant [AVA] application. There have been over 48 million interactions in the first four months!
RBC is also investing $500 million this year to build the IT skills of their employees.
RBC is also focused on the stewardship of data. The strength and trust of financial institutions is the core to a strong economy. RBC policies are based on "opt in" to provide value relevant to both clients and the bank. Banks that breach that trust will struggle.
Ginni (and the rest of the company) has re-invented IBM to achieve exponential change. The change impacts all industries, not just the three we saw on the stage during this keynote session.
To follow along with the rest of Think2018 conference, watch the live stream on [www.ibm.com/events/think/watch] or follow the twitter hashtag #Think2018