The Six Five team discussed the announcements coming out of IBM Think 2021.
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Patrick Moorhead: Topic number one, IBM Think 2021. Daniel, it looked like it was all about hybrid cloud and AI.
Daniel Newman: Yeah. It was another big event circling the wagons, buddy. And you mentioned this right. I think there was somewhere along the lines of five to six concurrent events in one week last week. This week wasn’t quite that bad, but IBM Think has been on the radar. And I was really eager to hear what Arvind Krishna CEO had to say coming out of the keynote. And you were absolutely right. The company had several announcements, new sequel announcements. It had some AIML updates. It had some big ecosystem updates, but I really was trying to look at it more holistically and put it all together. And what I basically came to is the company is working really hard to take its capabilities and bring data and AI closer together and be the enterprise hybrid cloud company.
Now having said that, there is no shortage of challengers in this market space. The company is going to be facing fierce competition. AWS and Azure, Google always are going to be a serious set of players. But here’s the thing. This is less about announcements, more about the vision that the company brought together. The company just a few weeks ago had Red Hat Summit. And for many of you that don’t know that, IBM owns Red Hat. Paid $34 billion for it. And this was the basic technology building block that allowed the company to connect everything it’s done as a public cloud and a prem company and bring it all together.
What I really heard was this is going to be the path forward. Now, many of you know, they have the managed IT services company Kyndryl is what they’re calling it now, that will be spun off in the next quarter. IBM’s growth has been somewhat stunted in terms of quarter over quarter, year on year. And as a cloud company growing in the single digit or small single digit, loss percentages isn’t going to be sufficient. So when I was listening to Arvind, I was kind of listening to what the themes are. And there was a couple of themes that basically caught my mind.
One, they’re going to be an ecosystem company. There will be no boundaries within IBM in terms of how the cloud provides accessibility. For instance, building Cloud Paks, which you may have heard about. IBM builds these Cloud Paks. Some of their first Cloud Pak data services aren’t being built for IBM’s cloud. They’re actually being built for AWS. There is a for instance. The company recognizes that to be hybrid, it has to be open. It has to understand that companies are going to be working on various different clouds. The company’s fully recognized multicloud is going to be a critical path for. That’s one thing.
Watson, automation, AI, and data, making processes more streamlined. That’s another big play. The company is going to use all of the tools to be able to… What I would say is it was one of the most prolific early AI players, and then it kind of got quiet, Watson got a little bit quiet. Understanding the path forward with Watson got a little bit quiet. The company showed some strong direction there through what it presented this week.
And then the third thing was partnerships, Pat. So Arvind spent a lot of time on partnerships in his keynote. A couple of the more notable ones to me… While CVS was kind of the one that everyone was really interested in because the conversation was about COVID and technology to enable the deployment of the vaccine. That’s a human interest story. But the other two was the Siemens conversation with Siemens Digital’s CEO, Tony Hemmelgarn.
And then, the other one was with Brett Taylor from Salesforce. And the focus, Pat, on those two really caught my attention because one, most people would never think of IBM and Salesforce working closely together. But the bottom line is the two companies worked very closely together through the global services business. And it is something that IBM is making itself known that, “Hey, we can do this. We can do Salesforce. We can do SAP. We can do Splunk.” There’s lots of services. No boundaries.
And then the last thing, and before I leave you, because there’s plenty of other topics. I don’t know what you heard. But the IOT, the partnership with Samsung and IBM… or Samsung… Siemens and IBM is a great example of that true IT OT convergence. And in Arvind’s presentation, he really emphasized the fact that the company is building the cloud to be able to scale, not just what’s going on in the data center and with traditional IT, but really at the edge with things like manufacturing and OT, which has been something we’ve talked about for years, but still has a really long way to go.
Patrick Moorhead: Daniel, that was a great take at the high level stuff. So what I’m going to do is just dive a little bit into some of the announcements. So first off, the company had some announcements before IBM Think. So for instance, a two nanometer nano sheet test chip, the first on the planet, which really led to me looking at IBM as a tech company, and a premier tech company. I think that’s what some people miss.
So first off, IBM introduced Cloud Pak, auto SQL integration that essentially is what they’re showing up with a data lake. They’re claiming getting AI to get answers to queries eight times faster, in theme of AI and hybrid cloud. There was also Watson Orchestrate which, it’s funny, I think I might be the only person who looked at this as a low code tool to pull together workflows, essentially using AI to pull together information from all the IBM applications, but also from Slack, Salesforce, SAP, and Workday. Every cloud company, every solutions company who’s serious has to have something like this.
There was also an announcement called Maximo mobile, and this is a mobile asset management solution. And essentially what they’ve done is they took that application and made it mobile. Picture a technician around like gas or electrical transmission lines, offshore wind turbines, scaffolding, all the dangerous stuff. And I thought that was pretty cool. There was also a Project CodeNet, and man, I love this. I did a webinar on this, essentially think of AI being able to go in and inspect an application code, so source code and look at what’s junk, what’s old. And you need a tool like this to turn an application into, let’s say, a modern application. Let’s say it’s 20 years old. What code isn’t being used and then cut off? You don’t have to touch that code. So we’re kind of going from science fiction to reality with CodeNet.
And then finally, in quantum computing, IBM is a leader in quantum computing. There’s only a handful of companies up there that are leaders, and IBM is one of them. IBM brought out what’s called a Qiskit runtime software, which essentially they’re a development environment. And they’re claiming 120x increase in quantum circuit processing speed and works with IBM’s hybrid cloud solutions.
So getting back to Daniel, kind of what you talked about, the strategic framework, it was all about hybrid cloud and it’s all about AI. I, for one, am looking forward to… I love hardware, I love software and I love the cloud. I’m looking forward to seeing some accelerated AI hardware from IBM. That is kind of the next step. I know they’ve got a couple of designs that they’ve talked about, but they are a full scale house and I want to see more of that. I love the cloud and I love the software. I want to see the hardware, too.
Daniel Newman: Well, I knew you always want to talk about, let’s add, those little nanometers, Pat. And then IBM’s down to two. I mean, what’s the scale at the end of this thing now that we’re getting so close to zero?
Patrick Moorhead: I’ll give you an answer. I think we’ve proven we can get to a half. But there’s also photonics that we’re looking at. So instead of copper being the connector, actually light being the connector. So stay tuned-
Daniel Newman: I knew you’d have an answer for that.
Patrick Moorhead: It’s ridiculous. Okay. Great talk here. We’re actually on time here. Five minutes up front, five minutes a topic.