Yesterday at IBM Edge, IBM showcased products and customers who spoke to how IBM could make and save customers money. Today, IBM is more focused on how IBM technologies are changing the future. Yesterday was about fixing today’s problems, today’s session is about how IBM is helping customers anticipate the future. First day was tactical, second day is strategic, and this is all about Smarter Computing, Smarter Cities and a Smarter Planet.
We began on the topic of a Smarter Planet, and the presenters started by listing the massive number of sensors that exist in the world, ranging from things that monitor the weather to RFID tags on parts. This gives us a massive amount of data and creates the requirement to make profitable use of it. They drifted into solutions and talking about how IBM technologies are letting IBM and IBM partners ever more closely target a demographic of one, and to develop highly focused campaigns based on this information. It is interesting to note that this event isn’t MC-ed by IBM’s CEO of its line managers, but like EMC World and much of Dell’s last analyst event, the central role is played by the top marketing people. In the end, this is a marketing event and these folks should be the most expert.
IBM’s Strategic Positioning
IBM evidently has 3,000 researchers in a massive number of labs, 100 software labs alone, invests $6 billion annually in R&D, and has over 65,000 patents. This supports the argument that IBM plays the long game; much of this effort is focused on building smarter solutions. The investment in Flash is $1 billion, it put $800 million in eX5, $2 billion in PureSystems, and $7 billion in PureSystems. IBM has bought companies in the cloud space to automate public cloud computing, in employee management, in mobile app development, and in an analytics company, among others. It has 9,000 analytics consultants, 30,000 analytics engagements, over 100 SAS engagements.
IBM’s Competitive Advantage
Forrester, Gartner, EMA and IDC rank IBM as the leader in servers and other related technologies, showcasing that IBM investments have paid off. According to IBM’s latest CEO survey, the most important thing assuring the future of their firms is technology, and number two is cost. Currently, CMOs are outspending CIOs in technology. But this isn’t a reduction in the CIO’s budget; this is a repurposing of the marketing budget, and IBM is changing to address this opportunity strategically. Using IBM technology, Kroger increased database performance 10x. Sprint’s director of IT operations came to stage indicating the company had improved data access 45x using IBM technology.
Anticipating the Culture Change
It is clear the world is going through a massive transformation and IBM is a demonstration of how a company can transform itself to address these changes. However, this is all about helping IBM customers change. WellPoint, the largest health services provider in the U.S., was represented by its EVP of Clinical Health Policy and Chief Medical Officer. The story he told was of a researcher in leukemia who actually developed the disease. He had a long fight, and was losing and losing badly. They were able to sequence his DNA to create a cure and he is cured today.
This same kind of thing can be accomplished to scale with Watson, saving lives all over the world and showcasing very powerfully, particularly to those of us who have lost, or will lose, loved ones to a series of terminal diseases the power of “Smarter” when applied directly to our lives.
RAND surveys indicate that about 55 percent of the time we get the right care, the system pays for volume rather than quality. The medical industry is focused on driving more – not better – health care, and we know that one-third of the massive amount the nation spends on health care is wasted.
Household incomes have increased about 17 percent over the last decade, but health costs have doubled over the same period. Neither individuals nor companies can afford this kind of imbalance in growth. Medical information is doubling every five years and medical professionals can’t keep up. People in this audience, potentially a lot of them, will likely die because their medical care professional won’t know of a procedure that could save them. IBM’s Watson could fix this. As an observer, I think there is no presentation stronger than one that could save our lives. This so trumps power savings.
WellPoint currently takes a massive amount of information from labs, patient information and research and uses Watson to analyze cancer patients to make sure there is no wasted cost and that you have the best chance of recovering. A living, healthy patient is a profitable patient. Wow, suddenly I’m a huge fan of WellPoint and IBM Watson (actually I’ve always been a Watson fan, but now it is personal). Watson has improved effective care from 55 percent to 80 percent when it is applied. While few practitioners use Watson today, by the end of the year, 50 percent of WellPoint’s practitioners will be using it. As a result, many of the folks here will live to a ripe old age, who otherwise wouldn’t have, because of WellPoint and Watson, even though cancer types of illnesses are becoming more complex and more difficult to correct.
The way they got here was that cancer researchers from a variety of cancer areas took years of research in each area and fed it to Watson, making Watson into the leading information resource in smarter cancer diagnoses and treatment. The treatment even takes into account the profession of the patient so that a treatment is less likely to damage that career; for instance, a musician wouldn’t be given a treatment that would damage their ability to play music.
IBM starts with the Secretary of Defense anticipating a 9/11 cyber-attack. (I’m reminded that my wife wanted me to buy a generator and once again pledge to get that done this weekend.) IBM points out that if the poorly protected generators are taken out, the rest will burn out due to the increased load. Threats vary from the electronic and remote to the physical and local. IBM is focusing its Cognitive Computing (initially Watson) at this problem. This is the nuclear-class response to this threat because it can look at a varied set of events and present a highly effective response in real time. They get this future result by enabling the system to see all aspects of the problem, including touch, sight, hearing, taste and smell. When it is done, it should be finally able to provide a defense that only an attacker with similar cognitive capability could beat. Granted, that could be a hostile or even a domestic government agency or large corporation that bought Watson or something like it. The nuclear example is exactly to point. But no one else is operating at this level today, at least not publicly. This last will keep me and many of you up at night.
Analytics in Politics: Elections Like Jiffy Lube
What if elections were like Jiffy Lube? It used to be that oil changes were a pain in the butt, but with services like Jiffy Lube, they are far easier and almost painless. What if elections were like this?
IBM brought up David Becker from Pew Charitable Trusts to talk about applying technology to make elections more painless and more effective. This speaks directly to creating a smarter world and certainly improves the chances of creating a more effective government. Apparently, according to Pew research, dead people are currently one of the more effective voting demographics (no wonder I want to move to Belize). Elections are screwed up because most of the paperwork is in paper and comes at one time, right before or during the election. The result is that the system sucks (not his words, but more accurate). For instance, depending on state, your voter information has between a 25 percent and 90 percent chance of being accurate (kind of explains why some states seem really screwed up at the moment).
IBM was engaged to come up with a solution for the voter registration problem and it had to be automated. It developed a contextual solution that could merge databases from different agencies and automatically update voter information. Once the solution was demonstrated, the folks in voter registration literally gasped. Voters could be moved electronically between regions automatically when they moved physically.
IBM has also demonstrated that creating an online registration capability dropped the cost of registration by 97 percent. Better, faster, cheaper AND a better country. Name another company that gets all four.
Wrapping Up: Uniquely Powerful
This smarter effort is tied to keeping us alive, safer, and even making our government work better. I’m struck by how only IBM seems to be working at this extreme level. Edge was an incredibly appropriate name for this event. But the Edge may actually be applied to the quality of our lives and the length of them because one without the other is far less valuable. Now that’s an “Edge” I can personally get behind.