IOD '09

Arvind Krishna on information-led transformation


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Krishna: When we have looked at all the problems our clients are facing, they're getting streams of data coming at them. We estimate that the world has 180 exabytes of information — that's one with 18 zeros after it — growing at 50 exabytes a year. You're putting instruments on water pipelines, oil pipelines, containers, automobiles, all parts that ship inside automobiles. You get all these streams of information coming at you.

You might have heard one of our clients, CenterPoint Energy, that talked on stage. When they finish with their current Smart Meter program, they're going to be getting meter reads every 15 minutes from 2 1/2 million meters. So instead of doing 80,000 transactions a day on meter reads, they're going to be doing 160 million transactions a day on meters.

You think about this incredible explosion and then you think about, who's going to help? Who can help contain all of this data in order to get the insights you want in a way that costs don't scale with it? Going from 80,000 to 160 million, you're talking about a cost explosion of almost a thousand, two thousand times.

So how do you take maybe a decrease in the IT budget or a tiny increase and still deal with all this information?

So you look at the innovations we are doing. This is not just incremental, this is incredible innovation you have to do to be able to both scale with our customers, be as robust as they want, and to be able to do it with fewer people not more.

You've got to have a partner who can reduce all of these information management costs while enabling all the analytics that let them optimize their business.

That's why I'm excited.

developerWorks: You know, I would love to ask you, too, with your broad experience at IBM and your perspective in all of this, how do you place this opportunity moment and what's transforming right now? I mean, how big is it in the grand scheme of things?

Krishna: This is an inflection point in our industry. So if you could step backwards, IT has played an incredible, incredible role in breaking what's called the labor cost curve. Previously, as a business scaled it had to hire more labor, and more labor, and more labor. If you were an insurance company in 1920 or 1930, each time you wrote a policy, that meant there was that many minutes of work for some clerk in a back room writing it all down on a ledger that had to be transcribed, kept in a backup ... meant labor increased with revenue.

Once you went to information technologies, your labor costs is fixed but you can keep growing the business. Well, not quite: You need a bit more call center, a bit more claims. But, nowhere in line with the growth of the business. That was the application agenda on automation.

Now, look at the current environment. Revenue is not growing for many, many of our customers. So still, how do you improve your bottom line? It's about getting the information you already have and then acting upon it to find how do you take some, how do find your most profitable customers? How do you make your least profitable behavior acting most profitable? Which market segments may not be worth getting into? How do you stop water leakage? An amazing statistic: 45 million gallons a day of water lost under the City of London due to leakage from water pipes.

So that means if you can stop that leakage, you can bring in a million more people and still not need more water. What an advantage for a country given the things that can go wrong.

So when you look at the clients, they're looking at, how can I take advantage of this inflection point that's there, the capability that has emerged in the underlying infrastructure?

Now that you've got the capability, how do you leverage it to improve your bottom line and to do things that are better for the enterprise, but also for the planet.

developerWorks: What about the conversations you're having at the conference — are you encouraged by how the message is being received and what you're getting back?

Krishna: Oh, I've been getting a simple question from all my meetings and I must have gotten 50, to be honest. The simple message I'm getting is, they're asking:

  • "How do I get started?"
  • "What help are you going to give me to succeed?"

It's no longer the question of, well, why should I do this? That question has not been asked once. So that says a lot about how our clients are responding to all of this.

developerWorks: Thank you so much, Arvind Krishna, IBM Conference ... Information On Demand Global Conference 2009 in Las Vegas.

Krishna: Thank you, Scott.

developerWorks: Pleasure.

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Zone=, Cloud computing
ArticleTitle=IOD '09: Arvind Krishna on information-led transformation