IBM Exec: Chapter One of the Enterprise Sector’s Cloud Journey is Over

The first chapter of the enterprise sector’s transition to the cloud is over and it’s now the middle of the second chapter, with machine learning (ML) playing a key role, according to Martin Jetter, SVP of IBM Global Technology Services.

Only about 10-20% of workloads are cloud-enabled now, “so I would say chapter one is behind us” and there’s more work to be done, he said Nov. 13 in a keynote at the UBS Global Technology Conference in San Francisco.

He added: “We are now in chapter two and chapter two is, from an IBM perspective, how do you make these enterprises cloud-ready and establish a balance between the traditional environment [and] the new environment?”

Noting that he frequently meets with Silicon Valley companies, Jetter told attendees: “Three years ago, no one was talking about hybrid. Everybody was talking about public cloud. You couldn’t find a company which could explain to you how do you get from the traditional environment where you have a thousand applications in a client server environment into the new. There was no answer.”

But he was quick to add: “It changed over the last two and a half-three years and today people speak about hybrid; people speak about the different capabilities – that there is a coexistence.”

ML is having a big impact on IBM and its clients, according to Jetter, who pointed out that, thanks to the technology, his managed services team was “already down from the 140 million events” it had handled each year to “10 to 12 million where a human being needs to interact.”

He added: “The rest is already automated. We have started to build out an IBM services platform with Watson [and] we are starting more and more to predict when certain systems may break.”
IBM is, in a sense, “eating our own cookies,” he joked, explaining: “We are using Watson in our services platform. By the end of the year, we may have about 1,700 clients connected to the platform. And we are using Watson as well in our call center operation.”

Noting that he’s responsible for IBM’s growing Technology Services & Cloud Platforms segment, he told attendees that segment represents about 45% of IBM’s total revenue. One of the three businesses included in that segment, integration software, represents about $4 billion of the segment’s $35 billion in revenue alone, he noted.

Integration software is used when an organization is building out cloud environments and helps make applications ready to be “transferred between different constituencies and infrastructures,” he explained. IBM has been fielding two new integration software products, he noted. The first, IBM Cloud Private, already has more than 200 clients and added more than 95 new companies in the past quarter, he said. The second relatively new integration software product, multicloud environment, was introduced due to growing demand, he told attendees, noting enterprises already often have more than five clouds and need the ability to manage all of those different cloud environments and make sure applications function in traditional and cloud environments.

His core area of responsibility at IBM is Global Technology Services, which includes infrastructure services and technology support services, he noted, adding a growing number of IBM clients are building out hybrid cloud environments.

Within IBM’s Technology Support Services, most call requests coming in are being handled automatically now, but there are still people who want to talk to other people, he pointed out. Watson is being used by IBM to support call agents, so they are “better-positioned” to handle requests immediately rather than needing a second specialist to help a client, he said.

IBM is seeing artificial intelligence being used in projects for operational excellence, “where it drives productivity, but we see it as well on the revenue generation side, where” it’s being used in the “acquisition of new clients [and] offering predictions in that environment,” he told attendees.

Summing up his keynote, he concluded by saying: “Chapter one in cloud is finished. Chapter two is all about enterprise. It’s very serious business. It requires a lot of integration capabilities.” IBM was also “extremely proud with” IBM’s recently- announced $34 billion acquisition of Raleigh, North Carolina-based open-source software company Red Hat, he said. “I think it gives our clients the choice for open standards,” Jetter said.

Separately, IBM said Nov. 14 that work was “underway with leading European companies to continue to innovate with blockchain, progressing projects from proof of concept to production environments.”

Noting that there’s now “more than 500 blockchain projects globally,” IBM said it’s “engaged across all industries, where European projects in particular are on the rise.” Citing IDC research, IBM said “blockchain spending in Europe is now growing faster than anywhere else.”

“From large enterprises to start-ups, across multiple industries, businesses across Europe are selecting IBM Blockchain,” Andrew Darley, IBM Blockchain platform leader, Europe, said in a news release. He added: “Clients are attracted by the production-readiness of the IBM Blockchain Platform, allowing them to run highly secure networks in any environment of their choosing, on premise, via IBM Cloud, or an increasing number of other industry cloud providers.”

European clients are continuing to work with IBM to drive blockchain innovation in their industries, IBM said, pointing as an example to a collaboration between it and Telefónica on the development of a proof of concept (PoC) based on IBM blockchain technology to help solve one of the major challenges of communications service providers, the management of international mobile phone call traffic.

The Central Bank of the Republic of Azerbaijan and IBM, meanwhile, are developing a Digital Identification System based on Hyperledger Fabric, a Linux Foundation framework, “to verify the reliability of the documents related to both individuals and legal entities for use with banks, credit providers and similar organizations,” IBM said.

Also, Finnish retail cooperative S-Group is testing a Pike-perch radar solution based on IBM Blockchain technology, as part of the retail group’s strategy to improve customer experience, IBM said. PKO Bank Polski also implemented a blockchain-based “durable medium” platform built together with KIR (Krajowa Izba Rozliczeniowa S.A. – Polish automated clearing house) in partnership with IBM to help the bank achieve compliance with the European Union Payment Services Directive related to customer communication, IBM said.

For more information about IBM’s UBS Global Technology Conference keynote, click here.

For more information about IBM’s blockchain announcement, click here.