The Ironic Outcome of Outthinking Status Quo for IBM

Rob Enderle
Slide Show

How to Find Business Value in Your Data Through Modernization

I’m at IBM Edge this week with 50K of my closest friends. Tom Rosamilia, SVP of IBM, took the stage first. I’ve known Rosamilia for a few years. He led in the idea of infrastructure as a product for the firm and now controls a major chunk of IBM. He’s one of the most competent executives I’ve ever met.

He opened with the idea that the world has really changed. An example he used was when his son was using Snapchat with his friend in Turkey when the latest coup attempt occurred. Rosamilia found out about the coup from his son long before local media picked it up.

Today, an increasing number of executives and companies are using their ability to parse social media to gain competitive advantage or to respond to world events in a timely way. The information is there; business people just need help to make sense of it and then to make related decisions.

That was the foundation of Rosamilia’s talk: the critical need for successful firms to better understand the world around them and “Outthink the Status Quo” (this was the title of the opening keynote).

IBM Pivot Status

IBM is in the midst of moving from the heavy hardware/software company most of us have known most of our lives into a cloud services company. But IBM’s unique angle is intelligence. This angle isn’t applied to just services in the cloud but increasingly smart services, services that think. If you know IBM, Think is its message that goes back decades.

IBM is, in effect, moving from systems that assist you in thinking to systems that can do an increasing amount of thinking themselves. Or, Think is moving from something IBM can help you do to something it does for you. IBM appears to be mostly done with this pivot operationally; now it’s just a matter of time before its revenue and profit stabilize to the new model.

Systemic Performance

Rosamilia argued that the world is moving from a more traditional kind of linear performance as defined by Moore’s Law, to an ever more capable set of systems that operate in parallel. Speed is not defined as how fast you can do each transaction but how many transactions you can do at the same time. Whether it’s being able to do a credit check at the same time a financial transaction is being attempted, or the concept of autonomous cars, this move to intelligent systems is requiring a fundamental rethinking of the model.


This forms the basis of a lot of the development work IBM is doing on its Power processors and how they are being re-architected with partners to address the unique loads now being placed on them.

Plenty of Fish Example

Next up at the event was Plenty of Fish, a dating site with four million customers across the world; it competes by providing the best match for those looking for a date. The goal is to get someone through the process and out on a successful date as quickly as possible. This requires a lot of analytics because the system doesn’t just have to match up preferences quickly, it has to factor in past experiences so that the results get better over time; otherwise, users will abandon the service. Plenty of Fish’s success is likely due to the fact that the firm has been able to improve speed and accuracy to a level where the vast majority of dates are successful ones.

If someone signs up for this site, let me know how it works. I was going to sign up myself to answer that question and then thought about how I’d explain to my wife that I signed up for a dating site to “see how it worked.” I figured that was an outcome I’d just as soon not experience.

Jason Pontin 

Jason Pontin talked about the future. I’ve known Pontin for years and he is the storied editor-in-chief and publisher of the MIT Technology Review. This well-regarded publication focuses largely on the cutting edge of technology with an eye on major future trends and emerging technology. He spoke to the massive changes that are going on in the world -- changes that are forcing companies and governments to revisit how information is acquired and analyzed with ever more emphasis on intelligent systems and an ever greater need for massive parallel processing as these systems grow in intelligence.

Red Bull Racing and F1

Red Bull Racing came to stage and talked about why they win in F1. The cars have hundreds of sensors capturing information, telematics mostly, so drivers know exactly what is working and what isn’t. That info can advise the drivers and indicate when to replace components in a timely manner. Red Bull Racing has a massive need for real-time analytics as a result, and testified that IBM was at the heart of the related solution, saying that IBM’s technology was a good part of the reason why Red Bull Racing been so competitive.

Any time they can work cool cars into a keynote, I’m pleased. But this also has relevance for the cars you drive because, and Tesla leads with this, your future car will be connected in much the same way.

Wrapping Up: The IBM Irony of Outthinking the Status Quo

As I go through the different elements of the keynote, I keep coming back to the idea of “outthinking the status quo.” It is actually very much to point in that firms, and this includes IBM, succeed by rising above the average and outperforming the market and their competitors. In addition, given the fact that we are increasingly awash in more information than we can make sense of, as humans, it is also important that the systems can handle these petabytes of data and that they are increasingly able to advise and, at times, make decisions at machine speeds. This is the only way companies will be able to get ahead of the pack. That means that, over time, the ability of these systems to parallel-process massive amounts of data will likely be the competitive edge that successful firms of the future will need to succeed.

At IBMEdge this year, IBM was on point. Its success will be tied not only to how well it provides these tools to customers but how well it uses the tools itself. Technology firms already live or die on this kind of competitive edge. IBM, by heritage, should be the firm to drive Thinking into both itself and customers. There is more than a little irony in that, regardless of how it turns out.

Rob Enderle is President and Principal Analyst of the Enderle Group, a forward-looking emerging technology advisory firm.  With over 30 years’ experience in emerging technologies, he has provided regional and global companies with guidance in how to better target customer needs; create new business opportunities; anticipate technology changes; select vendors and products; and present their products in the best possible light. Rob covers the technology industry broadly. Before founding the Enderle Group, Rob was the Senior Research Fellow for Forrester Research and the Giga Information Group, and held senior positions at IBM and ROLM. Follow Rob on Twitter @enderle, on Facebook and on Google+.

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