IBM banks on hybrid cloud and AI to get it back into growth mode

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Peter Griffin

IBM’s Think 2021 virtual event this week was dominated by talk of artificial intelligence as a key tool of digital transformation and the company’s efforts to position itself as the lead player in hybrid cloud offerings.

While Think usually has a strong US-centric outlook, an opening keynote from Katrina Troughton, Managing Director, Australia and New Zealand, and appearances from IBM customers Beca and Straker Translations, at least gave it a local flavour.

IBM announced a handful of new services and products (see below), most notably including Watson Orchestra, which draws on IBM’s AI platform to offer no-code options for automating mundane office tasks.

In a media conference prior to Think 2021, IBM President and former Red Hat Chief Executive, Jim Whitehurst, told Umbrellar Connect that IBM’s focus on hybrid cloud solutions was the key to the company starting to grow again after a remarkable period between 2013 and 2018 where it reported successive quarters of negative revenue growth.

Hybrid cloud involves businesses hosting some of their applications, systems and workloads on cloud platforms, while keeping other mission-critical applications on their own data centre infrastructure. It has had less attention locally compared to the push by Microsoft and AWS for businesses to migrate to their public cloud platforms.

But the reality is that, for large organisations in financial services, telecommunications and government in particular, hybrid cloud arrangements can be more cost-effective, convenient from a compliance point of view and allow organisations to efficiently use their legacy IT systems.

“I’ve spoken with quite a few of our customers in Australia and New Zealand. Covid is certainly accelerating the move towards cloud, but it has also accentuated the need for hybrid cloud solutions,” Whitehurst told Umbrellar Connect. 

“Whether it’s regulatory requirements or legacy application architectures, or just the performance requirements, some applications are going to be on-premise,” he added.

Red Hat and OpenShift

While IBM has its own cloud platform, its major play is offering services that run across on-premises and cloud platforms. Integral to that strategy was IBM’s acquisition of Red Hat in 2019 for around US$34 billion.

“Certainly we’re seeing a move to the cloud,” Whitehurst points out. 

“But for IBM, a lot of that manifests itself in the hybrid cloud platform that enterprises are using and then our portfolio that runs on that hybrid cloud platform and the services capabilities associated with that.” 

Red Hat OpenShift is a family of containerization software products that let organisations develop and run their applications across their computing environments, from their own servers to the IBM Cloud as well as its competitors’ platforms.

“The biggest difference with our strategy versus many of the other companies talking about hybrid cloud, is we are delivering a common platform that runs across the various places a cloud architecture can run,” says Whitehurst.

“We are literally delivering the same infrastructure, whether that’s on IBM Cloud, on Amazon or Alibaba, or as you leave your mainframe on-premise. So we believe that the only way that you’re going to be able to have a true hybrid cloud architecture that gives you flexibility is if you have a common infrastructure that runs everywhere, and Red Hat OpenShift is the only common infrastructure that runs across all the clouds.”

As well as growth in its hybrid cloud business, Whitehurst said IBM was benefiting from strong appetite for cloud-based Software as a Service (SaaS) offerings. 

“We are seeing significant interest in, just kind of the broad implementation of SaaS-type offerings and as we continue to build and scale our capabilities to deliver platforms whether its ServiceNow, WorkDay or Salesforce. That’s certainly helping drive our growth agenda as well.”

AI adoption flat during Covid

As Think 2021 kicked off, IBM revealed its Global AI Adoption Index 2021, which showed that business adoption of artificial intelligence was basically flat in the last year as more immediate priorities driven by the pandemic dominated.

The Index, based on a survey of 5,501 businesses from around the world (though not in New Zealand) also found that:

  • One-third of companies reported using AI in their business, similar to 2020 findings. A third of global IT professionals report their company plans to invest in both skills and AI solutions over the next 12 months.
  • 80 percent of companies are already using automation software or plan to use this technology in the next 12 months, and for more than one-in-three organizations, the pandemic influenced their decision to use automation.
  • 91 percent of businesses using AI say their ability to explain how it arrived at a decision is critical.
  • Over two thirds of global IT professionals drawing from more than 20 different data sources to inform their AI. Almost 90 percent of IT pros say being able to run their AI projects wherever the data resides is key to the technology’s adoption.
  • Almost half of businesses today are now using applications powered by natural language processing (NLP), and one-in-four businesses plan to begin using NLP technology over the next 12 months.

Key product announcements from IBM Think 2021

Watson Orchestrate  

Watson Orchestrate helps professionals automate tasks to increase productivity. Developed in IBM Research, it requires no IT skills to use it so professionals in functions like sales, human resources, or operations can use it to initiate work with a businessperson’s approach. A key example of IBM’s focus on natural language processing (NLP), Watson Orchestrate interacts with collaboration tools such as Slack and email in natural language. It also connects to popular business applications like Salesforce, SAP and Workday and it uses a powerful AI engine that automatically combines pre-packaged skills, on-the-fly and in-context based on organizational knowledge and prior interactions.  

Why this matters: This can help workers more quickly perform routine tasks, such as sending email or scheduling meetings, or more mission-critical tasks, like preparing proposals or business plans so they can focus on more high-value work.  

New Auto SQL capability for Cloud Pak for Data  

The new capability called “Auto SQL” uses AI to automate access, integration and management of data without ever having to move it. Available today, Auto SQL is based on the industry’s fastest performing data warehouse.    

Why this matters: Auto SQL solves one of the most critical pain points customers are facing as they look to reduce the complexity of curating data for AI and eliminate the high cost of moving data, while also uncovering hidden insights to make more accurate AI-driven predictions.  

Maximo Mobile  

IBM is launching Maximo Mobile, an easy-to-deploy mobile platform with Maximo’s leading asset management solution at the core. Maximo Mobile is designed to transform the work of field technicians who maintain physical assets such as roads, bridges, production lines, power plants, refineries and more. A new, intuitive interface provides technicians with the right asset operational data at the right time—all in the palms of their hands.  

Why this matters: Even in the most remote locations, users can access Watson AI and in-depth organizational knowledge to easily solve complex issues. This combination of AI, intelligent workflows, remote human assistance and access to digital twins puts decades of industry experience directly in the hands of technicians for safer, more efficient operations.  

New capability for WebSphere Hybrid Edition

IBM is adding a new capability into WebSphere Hybrid Edition that enables enterprises to optimize and modernize their applications and workloads to run in hybrid cloud environments. It’s called Mono2Micro and it uses AI developed by IBM Research to scan and analyze enterprise applications and provide recommendations on how to rewrite them for containers and microservices most efficiently. For instance, an enterprise can use Mono2Micro to decide more easily which applications to move to the cloud, which ones to containerize, or which ones to leave on-premises –  increasing efficiency, reducing costs and maximizing ROI.  

Why this matters:  This is critical as companies look to simplify how they modernize applications and migrate to the cloud.  

IBM Research is releasing Project CodeNet  

IBM Research is releasing Project CodeNet, a large-scale, open source dataset comprised of 14 million code samples, 500 million lines of code and 55 programming languages to enable AI’s understanding and translation of code. Project CodeNet is currently the largest, most differentiated dataset in its class and addresses three main use cases in coding today: code search (automatically translating one code into another, including legacy languages like COBOL); code similarity (identifying overlaps and similarities between different codes); and code constraints (customizing constraints based on a developer’s specific needs and parameters). 

Why this matters: IBM believes Project CodeNet will serve as a valuable benchmark dataset for source-to-source translation and transitioning legacy codebases to modern code languages, helping businesses speed up their application of AI.  

You can register to access Think OnDemand here.

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Peter Griffin

Peter Griffin has been a journalist for over 20 years, covering the latest trends in technology and science for leading NZ media. He has also founded Science Media Centre and established Australasia's largest science blogging platform,

Red Hat

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Red Hat is the world’s leading provider of enterprise open source solutions, using a community-powered approach to deliver high-performing Linux, cloud, container, and Kubernetes technologies.

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The term Infrastructure Modernisation rose from the expensive struggle businesses face maintaining, upgrading and scaling their digital content infrastructure requirements. This infrastructure refers to data center hardware, including all the storage servers, network devices, operating systems and middleware that allow companies to store, protect and access content. It’s usually complex, expensive to manage, a hassle to manage and update, hard to expand, and, in many cases, needs modernising.

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IBM banks on hybrid cloud and AI to get it back into growth mode

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