When IBM, the Armonk-based information technology services and solutions provider, reported its second-quarter financials in July this year, revenues from new businesses accounted for a little over half of its revenues. The newer businesses, which the company dubs as ‘strategic imperatives’, focus on a variety of emerging technologies from artificial intelligence to cloud computing. Revenues from these businesses grew 15% globally to $10.1 billion during the quarter.
Closer home, IBM’s India arm, which reported revenues of a tad less than $5 billion in 2016-17, wants to replicate its parent’s strategy here. In an email interview with TechCircle, IBM India managing director Karan Bajwa talked about how the India division was looking to boost revenues by devising solutions focused on emerging technologies. Edited excerpts:
How big is the market opportunity for IBM in terms of emerging technology-related solutions and services? What strategies are being used to tap that market?
All large companies need an enterprise-strength cloud platform, artificial intelligence to understand data and technology infrastructure infused with intelligence and security. We deliver all of that.
During the last five years, IBM has reinvented itself on the belief that data would reorder technology and business. This has resulted in the company aligning strategic imperatives that now contribute 48% of IBM’s revenue and we expect it to reach $40 billion in 2018. In India, we will use emerging technologies combined with deep industry expertise to spur innovation.
Besides this, we will also combine data with emerging technologies to help incumbents and our partner organisations to bridge the skills gap.
How has the IBM One strategy been playing out and has it gained acceptance? Has the company grown in terms of the number of customers?
We believe this moment marks an inflection point, not just for our company, but for business and society at large. In the second quarter of 2018, our strategic imperatives revenue grew to $39 billion, which represents 48% of IBM’s revenue. Within that, cloud now accounts for $18.5 billion, up 20% while security revenue was up by about 80%. Watson, our AI platform for the enterprise, is helping businesses improve how people make decisions in 45 countries across 20 different industries including banking, retail, insurance, healthcare and more.
In India, we work on diverse projects on AI, from providing services to the Manipal and Apollo hospitals in healthcare to helping nearly 1.2 million farmers predict the weather, what crops to seed and more.
Today, in India, four of the largest telcos, the milk and dairy products industries, insurance companies and banks, and airports use IBM systems. Two of India’s top banks employ IBM’s AI solutions.
IBM is involved in blockchain-based proof of concepts, some of which have are being implemented. Will this become a money-maker in the long run?
The IBM Blockchain Platform is designed to support live production networks. Developed in partnership with IBM’s clients for specific industries, the platform is a flexible software-as-a-service offering delivered through the IBM Cloud that helps successfully build a client’s blockchain network and apply it to their industry. We have hundreds of blockchain projects underway globally across industries such as education, food safety, identity, insurance, luxury goods, supply chain management and trade finance, among others. Over 300 active blockchain networks currently run on the platform and we have seeded the market with over 60 active blockchain networks globally.
In India, we have many projects and we believe 2018 is the year of full-scale production of blockchain projects. We are the blockchain partner for the trade finance and life insurance consortium. In addition, we are working with clients like Mahindra to develop a solution for supply chain finance. This cloud-based application aims to transform supplier-to-manufacturer trade finance transactions through a permission-based distributed ledger.
What is IBM's stance on the data localisation policy and what do you expect from the upcoming draft cloud policy?
In our view, organisations need to view policies on data protection as a chance to streamline their data management approaches for long-term efficiency as it presents an opportunity to foster deeper relationships with customers and citizens. Building mutual trust with clients based on transparent and clear communication will unleash opportunities for organisations that can take the best advantage of enhanced reciprocity while protecting the privacy of data. In addition, forward-looking organisations will view compliance as a chance to re-examine their privacy, security, and data management efforts, or as a catalyst to create new data-led business models.
Companies taking a comprehensive approach to data privacy preparations can potentially enhance several areas in the long-term, including streamlined operations and data management, improved security, better inter-departmental cross-organisational collaboration and closer customer relationship. The data + AI economy is paving the way for a host of new opportunities. It is important that organisations and governments look at data privacy beyond mere compliance and take a holistic approach across privacy, governance, people, processes, data and security – a catalyst for broader transformation.
Which sectors are readily adopting IBM’s emerging technology services and solutions?
India is uniquely positioned to succeed in the digital economy.
According to a recent IBM IBV study, titled ‘Cognitive India’, 91% of India’s cognitive innovators realise the value of both structured and unstructured data; 71% of executives surveyed said their organisations are likely to invest in cognitive computing within the next three years; 71% said that over 10% of their IT spend will be dedicated to cognitive. It is evident that now, more than ever, intelligence, not just data alone, can help business leaders transform their organisations. These innovators primarily view AI and cognitive computing as a way to grow their businesses. Identifying customer satisfaction, revenues and customer retention are key to embracing cognitive technologies. So, it is no longer just about cost savings.
Emerging technologies have been adopted across multiple industries from BFSI, telco, large enterprises to governments/public sector and startups – just the scale of adoption differs. Companies are re-evaluating their structure, go-to-market strategy and overall corporate identity. Data will soon become a key measure of whether a company will remain relevant through the digital revolution and how we receive healthcare, how we make financial transactions, how we shop, how we do agriculture and how we personalise education. India has a great opportunity to truly democratise AI, co-create and co-innovate to make every developer an AI developer. In this context, it will be critical for all the stakeholders, right from academia to startups, to partner at the ecosystem level and rally together.