IBM’s Brilliant Open Customer Focused Strategy
IBM’s Brilliant Open Customer Focused Strategy|

IBM Sets Watson Free! 

The Open Path To Success

Robert Enderle

I’m at IBM Think this week and while the most fascinating thing at the event was a debate between a human and IBM’s new Hybrid-AI prototype Project Debater it was a very un-IBM announcement on the next day that caught my attention. This announcement was that they were basically setting IBM Watson free from IBM’s platforms, both hardware and cloud, and allowing it to potentially reside on any cloud or platform the customer wants. This doesn’t mean that IBM hardware or IBM Cloud is giving up, on the contrary, the IBM Power and the IBM Cloud announced accelerators designed to massively accelerate the training speed of Watson on those two respective platforms.

This further showcases Ginny Rometty’s hard pivot from a company whose success was largely based on the now discredited lock-in approach to the open and collaborative approach that the market now (and likely always did) prefer.

Let’s talk about this huge change for both Watson and IBM this week.

Freeing Watson

If we loot to the future of IBM two technologies stand out and they are their Watson AI platform and Quantum Computing. Fortunately, the two efforts are currently very separate because, if we could do AI at Quantum speeds, there is a real possibility that humans couldn’t deal effectively with the result. Fortunately, Quantum Computing is still in its early stages and far from deployable and converting something like Watson to a Quantum platform would require a ground up recreation of the platform which puts this kind of product decades into our future. But part of that process would be to free the AI from a hard lock onto IBM’s platforms and allowing it to flow to platforms, be they on premise or cloud, that the customer wants.

So, the announcement that IBM made that Watson will be available across most of the existing cloud and on-premise platforms not only should be incredibly powerful for IBM’s customers and partners, it will also set them up for a future where Quantum platforms become available and speed that admittedly massively powerful implementation to market.

Strengthening IBM POWER9 And The IBM Cloud

While this might not seem intuitively obvious, breaking a hard connection between Watson and IBM’s hardware and cloud services will strengthen both. You see when a vendor locks a solution to their own platforms it removes the competitive imperative from them regarding the result. They don’t have to compete with their counterparts from other vendors and the related units tend to then focus on ever more creative ways to mine customers for money.

When you break this lock-in it forces the units to focus on competing and lights a fire under them because they can no longer rely on being carried by once locked-in solution. From a customer and partner perspective this means the folks they work with at IBM are thinking about what they want rather than more creative ways to mine them for money. You get accelerated, targeted, development and the customer also get an increased benefit of choice and flexibility. If the IBM hardware and cloud organizations don’t step up the customers are free to move and that not only bounds the customers’ risks, it makes IBM very much aware that keeping these folks happy is critical to their future. It is one of the most powerful wins for both IBM and its customers and partners possible because it puts focus for both where it needs to be. Tom Rosamilia (one of my favorite IBM executives), who heads IBM Systems, is on stage talking about how massively his Power9 Systems are outperforming their Intel based counterparts on platforms like SAP HANA. Granted a lot of this is because Intel is badly stumbling particularly on servers of late, but this focus on assuring each of IBM’s groups stands powerfully alone is increasing massively the firm’s competitiveness. For instance, according to Tom, IBM now has 8 of the top 10 retailers, 9 of the top ten healthcare providers, handles 87% of the world’s credit card transactions, all ten of the top ten telecom companies, and 8 of the top 10 car companies. Lock-in won’t get you these kinds of numbers, assuring the competitiveness of each unit does.

I should add one more interesting comment, Watson itself has been decoupled from itself allowing elements to be split out and applied both by other IBM groups and both customers and partners to create a far broader customer driven number of solutions.

Wrapping Up: Open On Steroids

One of the fascinating events I observed years ago was that when the EU forced Microsoft to open their APIs, they first fought the effort, then realizing they couldn’t win, flipped to becoming an Open Platform advocate. The result shifted the company from one that was slowly failing to a firm that competes with Apple and Amazon on being the most valuable in the world. IBM actually got this memo before Microsoft did, but it took the firm’s current leadership to execute against this concept at full scale. IBM is showcasing that this lesson holds across companies and that legacy firms still executing a lock-in strategy like Apple, Intel, and Oracle will fall off against firms like AMD, IBM, and Microsoft who have shifted to this new far more customer focused way of doing business.

The old way of doing business was to build products and find creative ways to convince people to buy them, this new method is divine a solution based on customer’s current and anticipated needs and create that solution in partnership with those customers and the channel (both direct and indirect). It is largely because of solutions like Watson that IBM can even take the better latter path and, if they can hold to this customer focuses approach, the result will not only please customers it will assure IBM’s success.