IBM Think 2022 Showcases Powerful Product Lineup, Partnerships, Sustainability and Skills Initiatives
IBM used its annual Think conference in Boston to showcase a powerful lineup of new product technology roadmaps, strategic partnerships and initiatives all designed to highlight the company’s revitalization under Chairman and Chief Executive Officer Arvind Krishna’s leadership over the past two years.
The overarching takeaway from IBM Think 2022 is that IBM is a preeminent technology leader in key digital-age technologies including AI, hybrid cloud, quantum computing and security. At the same time, IBM says it will increase its footprint in those technologies and pursue a strategy of partnerships. It will align with traditional rivals like Amazon AWS, Microsoft Azure, Google Cloud and others in hybrid cloud deployments and consulting engagements. IBM also fortified and extended its longstanding alliance with SAP.
Throughout last week’s Think 2022 conference (May 10-11), IBM’s executive leadership emphasized that the 111-year-old corporation will be at the forefront of crucial socioeconomic initiatives such as sustainability and closing the cybersecurity skills gap.
“Technology is the source of competitive advantage with digital transformation leading the way. Our clients and partners trust IBM to deliver the innovation behind hybrid cloud, AI and consulting solutions that help ensure their success,” Krishna said during a Q&A session with analysts. “IBM is being creative and co-creating with an expanding ecosystem to make progress on the most pressing issues enterprises and society face today.”
IBM Think Announcements Span All Areas
IBM’s Think 2022 announcements centered around several key areas, including technology product roadmaps for quantum computing and cybersecurity; hybrid cloud services partnerships and consulting; sustainability initiatives and closing the security and overall IT skills gap with major investments in the U.S. and internationally.
The most notable announcements include:
- Quantum computing/qubit technology product roadmap: IBM unveiled an updated and detailed roadmap for its quantum computing and 4,000+ qubit system over the next three years (2022-2025). This is an expansion of IBM’s original quantum technology initiative first unveiled in 2020. Specifically, the roadmap details IBM’s plans for new modular architectures and networking that will allow its quantum systems—developed in-house—to have qubit counts that scale up to hundreds of thousands of qubits. IBM says it will deliver three new scalable architectures to enable a new class of modular and networked quantum processors. The hardware will complement intelligent software built by IBM to distribute workloads “across quantum and classical resources,” IBM says, to avoid traditional infrastructure challenges and limitations. These new technologies will be leveraged toward IBM’s 2025 goal: a 4,000+ qubit processor built with multiple clusters of modularly scaled processors. To date, the company delivered the IBM Eagle, a 127-qubit processor with quantum circuits that cannot be reliably simulated exactly on a classical computer; and a 120x speedup in the ability to simulate a molecule using Qiskit Runtime, compared to a prior experiment in 2017. Later this year, IBM expects to unveil its 433-qubit processor, IBM Osprey, as well as IBM Condor, the world’s first universal quantum processor with 1,000+ qubits, in 2023.
- Strategic cloud services partnerships: IBM also announced a Strategic Collaboration Agreement (SCA) with AWS. IBM’s deal with rival AWS calls for Big Blue to deliver a wide range of its software catalog as software as a service (SaaS) on the Amazon cloud. The pact benefits joint IBM and AWS customers as well as the cloud vendors themselves. Enterprises get access to IBM Software, including automation, data and AI, security and sustainability capabilities that are built on Red Hat’s OpenShift Service on AWS (ROSA); the software capabilities will run cloud-native on AWS. Additionally, customers can purchase the IBM SaaS products in AWS Marketplace, and then set up and integrate with AWS. The availability of these SaaS products complements IBM’s existing portfolio of more than 30 software products that currently can be deployed manually in AWS Marketplace.
- IBM expands existing SAP alliance: Also, at Think, IBM extended its long-term alliance with SAP. IBM will migrate more than 375 terabytes of data from on-premises and multiple cloud environments to SAP’s S/4HANA enterprise resource planning (ERP) system. The company is using RISE with SAP on IBM Power on Red Hat Enterprise Linux (RHEL) on IBM Cloud to accelerate the migration. IBM Consulting will spearhead the transformation project and consolidate 500 servers and move more than 300 SAP instances. IBM says a pilot production program is underway in IBM’s own internal $13 billion software business unit. As part of the expanded partnership, IBM is migrating to SAP S/4HANA®, SAP’s next-generation ERP software, to perform work across more than 120 countries, 1,000 legal entities and numerous IBM businesses supporting software, hardware, consulting and finance. The project is focused on improving business processes with RISE with SAP S/4HANA Cloud, private edition, premium supplier option with IBM Consulting, and will ultimately move more than 375 TB of data to IBM Power Systems on RHEL on IBM Cloud. RISE with SAP brings together what businesses need to pursue their digital transformation objectives and accelerate their move to the cloud.
- Sustainability initiatives: Krishna says IBM intends to be a global leader in environmental, social and corporate governance (ESG), sustainability and security initiatives and standards. “We’re shooting for IBM to be net-zero by 2030,” well in advance of the Paris Accords’ 2050 goal. “This will be a true net-zero and not one just achieved with carbon offsets,” Krishna notes. “We’ve also set a goal of 65% [net-zero] by 2025.”
- New partnerships address skills shortage: IBM announced several new and expanded partnerships with six historically black colleges and universities (HBCUs), the U.S. Department of Veterans Affairs (VA) and Specialisterne Foundation. These alliances are designed to practically address the cybersecurity skills gap. IBM will build six cybersecurity leadership centers at HBCUs North Carolina Agricultural & Technical State University, Southern University System, Clark Atlanta University, Xavier University of Louisiana, Morgan State University and South Carolina State University, with plans for at least 14 more centers in the future. The universities will receive online learning curricula, cloud access and an immersive learning experience aimed at developing cybersecurity skills. IBM’s partnership with the VA and Specialisterne will bring IBM SkillsBuild to transitioning service members seeking job training and credentials, customized learning paths and other accelerated, nontraditional job training for high-demand technology careers. And finally, IBM will unveil job training to neurodivergent community members in 13 countries including the U.S., U.K., Australia, Mexico, Brazil and Canada. Examples of neurodiversity, IBM says, include attention deficit hyperactivity disorder (ADHD) and autism.
Sizing up the Announcements
Overall, IBM’s Think 2022 conference is the latest indication that IBM is well on its way to a fiscal, technological and tactical long-term strategic recovery.
When Krishna took over as chairman and CEO, he faced enormous and unexpected external forces like the global pandemic and supply chain disruptions. Internally, he was tasked with sharpening the company’s technology focus and jettisoning unprofitable business units.
“IBM is pivoting and that takes time,” says Rob Enderle, president and founder of the Enderle Group, a Bend, Oregon-based advisory firm. “Krishna took over just as COVID-19 hit and upended everything. Plus, he also had to make tough choices like selling Kyndryl and IBM’s Watson Health business. But they’re now achieving tangible progress.”
First and foremost, Krishna was under pressure to reverse IBM’s lagging and lackluster financials—which included 22 straight quarters of declining revenue. The IBM Think 2022 announcements come on the heels of IBM’s first fiscal quarter financial results, which hit the top end of the company’s revenue forecast and beat Wall Street estimates. In the fiscal first quarter IBM reported revenue of $14.2 billion, up 8% from the same period a year ago; net income was $0.7 billion. IBM’s growth was driven by IBM’s Cloud & Data Platforms unit: cloud revenue rose 14% to $5 billion in Q1. Software and consulting sales, which represent more than 70% of IBM’s business, were similarly robust: up 12% and 13%, respectively.
Also fueling IBM’s cloud momentum is its 2019 acquisition of Red Hat for $34 billion—a fact which IBM executives referenced repeatedly throughout the conference. Back in 2019, many financial and industry analysts questioned the $34 billion purchase, wondering if it would pay off. IBM silenced the doubters and critics. The Red Hat acquisition bolstered IBM’s hybrid cloud foundation and extended its global cloud reach to 175 countries with more than 4,000 hybrid cloud customers. Red Hat gave IBM game and improved its “street creds.” Much of the post-acquisition success is owed to the fact that IBM executives wisely allow Red Hat to maintain its independence. IBM executives tout the fact that it leverages Red Hat technology, IBM maintains a hands-off approach to running the company and dictating strategy.
IBM Makes Strides But Challenges Persist
Overall, IBM’s outlook is positive.
However, it faces significant challenges. IBM must find its footing in today’s age of digitalization and modernization.
The competition is intense. The fact that vendors and customers are still recovering from the COVID-19 global pandemic is complicating matters. Supply chain disruptions persist worldwide.
IBM must continue to amass a string of several consecutive quarters of revenue and earnings growth. That means scoring wins in each of its critical market segments: hybrid cloud, AI, quantum computing, security, consulting and infrastructure. Despite offering some of the most advanced and robust technology in the industry, IBM must close the market share gap between itself and the big three: Amazon AWS, Microsoft Azure and Google Cloud. That trio accounts for a combined total of nearly 70% market share compared with IBM’s estimated 13% portion.
Krishna and his cloud team recognize this and have adopted an open strategy of partnerships. “I look at both Microsoft and Amazon as likely partners in this journey, not as being numbers one and two. In hybrid cloud environments, it’s up to customers to decide where the workloads run. We want to be open and transparent and partner with everyone,” he says. “Red Hat is the glue that can hold the hybrid cloud together and let enterprises manage the complexity.”