IBM’s APAC CEO talks up next chapter of cloud adoption

The future is hybrid cloud, as IBM and other IT suppliers have declared, given that there will always be enterprises that continue to maintain some workloads on-premise while moving others to the public cloud. At the same time, they are looking at more pervasive use of artificial intelligence (AI) across the enterprise.

IBM’s Asia-Pacific CEO Harriet Green described this as the next chapter of cloud adoption, one where enterprises move even more business applications to the cloud, while increasingly operating in a multi-cloud world.

In an exclusive interview with Computer Weekly, Green, who is IBM’s head honcho in India, South Asia, ASEAN, Australia, New Zealand and South Korea, offers insights on the challenges that CEOs are facing in the region, how IBM is helping enterprises ease into the next phase of cloud adoption, and what its impending acquisition of Red Hat means for its customers in the region.

What do you think are the most common challenges that CEOs in the Asia-Pacific region are facing?

Harriet Green: Over the past five years, we’ve invested $40bn to really ensure that we’re able to meet the needs of the changing technology, business and social environment – whether that’s in cloud, security, blockchain or quantum computing. For the first time in the middle of last year, our revenues reflected that. Over half of our revenues were from the strategic initiatives and those new areas.

The world now is extremely interesting. As we think about society and technology, it’s really all around this exponential explosion in the amount of data. Whether people call it the new air or new oil, this explosion of data and how enterprises deal with that is at the core of this. How that data is being used by each company to create new products and services, improve client and customer interaction, as well as cost savings, is really where all of this comes together.

So, in the context of this data, the things that appear to be on the minds of CEOs are: “How can we use the data we have to be more efficient, effective and to create new products and services? How can we use this data to scale up our AI experiments or the things that we’ve been doing?

“How do we have the most agile and flexible cloud environment to enable us to do the things that we need to get done? Then how do we train, develop and support our people? How do we have the right skills that we need? And how are we on the right line of good tech, bad tech, good enterprise, bad enterprise as we make good use of this data?”

You would’ve seen out of all of the commentary that about 20% of companies’ workloads have moved to a cloud environment. These workloads have usually been microservices that are native and born on the cloud. We can see this as the first chapter. The next 80% of the cloud opportunity focuses on shifting business applications to the cloud and optimising everything from supply chains to sales. This is the next chapter of the cloud.

IBM has already invested over $40bn in five years to ensure that we’re a leader in security, blockchain and hybrid cloud, and Red Hat will be the beneficiaries of this

In chapter two, it’s about managing multiple cloud environments and managing data so we can scale the AI pilots that we’ve done to be able to have an impact on operations and business. How do we ensure that they’re not locked in to any individual cloud environment? As you know, IBM has been long-term supporter of open source, starting with our $1bn investment in Linux 20 years ago.

IBM has been investing in the emerging high-value segments of the IT industry and the acquisition of Red Hat really doubles down and reinforces the major role we play in this trillion-dollar hybrid environment, and that we can help manage these multiple clouds. We have the capabilities, we have the experience. We’ve been helping major enterprises – whether they are airports, banks or airlines – manage tougher workloads and to bring them into a robust, open and secure working environment.

The third piece is skills. Together with our partners around the world, IBM has created a new education model called P-Tech, where we train young people to get practical knowledge and capabilities – for example, around cloud architecture so they can quickly make a contribution in the workplace, even without a traditional college degree. In Asia-Pacific, the P-Tech model is now in Australia, Singapore, Korea, and the Philippines, and we plan further expansion later this year.

This issue of good tech is really important to CEOs. Where do you land on this issue of whose data is it? In chapter one of cloud, only a few collaboration and social media businesses have been the protagonists whose business models are predicated on selling your data.

As you know, IBM has not done that. We may hold the encryption keys and we may have worked on deeply intensive programmes, but it is our clients’ data to do with as they will, and we were one of the first companies to issue our ethics and our transparency beliefs and principles around data.

In 2000, we had our first data privacy officer as we’ve really looked to ensure that these issues are managed and today, we have offerings and capabilities that enable clients to detect any unconscious bias that is being code into their products.

So, for example, if clients are using AI to determine if someone should be insured or not, we can assess every element of the code and capability, and give a clear reason why someone may have been denied or approved for a particular insurance policy.

Can you provide examples of how IBM has helped Asia-Pacific enterprises in the areas that you’ve just mentioned?

Green: We have a lot of clients here in Asia-Pacific and I’ll name some and tell you what we’re doing. We have worked with logistics startup FreshTurf, which is using blockchain to simplify deliveries in Singapore or Pacific International Lines, to develop the first successful electronic bill of lading to speed up the time it takes to transfer shipment documents from seven days to just one second.

There’s also Westpac, Australia’s oldest bank, that has moved its core banking capabilities to a secure and hybrid cloud environment, which enables it to make changes and be more efficient. It has also saved significant amounts of money in pulling all of its data into a cloud environment. Another one of our clients is DBS which has a centre of excellence for robotic process automation.

IBM made the bet some years ago on hybrid cloud when no one was talking about it. Now, everyone is talking about hybrid cloud because that’s the way the market has experimented

In Australia, Woodside, the country’s largest energy company, has major rigs, and relies heavily on its engineers’ experience and knowledge to run the rigs. An engineer may have 30 years of knowledge, which we’ve been able to pull into Watson so that other engineers can tap all that experience and knowledge to manage major rig installations.

So, Asia-Pacific has been a huge user of all of these different technologies – blockchain, AI at scale and cloud – to move forward in this great exponential change of technology in industry.

Asia-Pacific is obviously a very diverse market. Do you see any market dynamics that might be different from the rest of the world?

Green: Going back to what you were asking about CEOs, they’re thinking about people, process and data. For people, how do they get the skills they require? For process, they’ve started these AI pilots, so how do they scale those now?

The process that we use with our IBM Garages, with our agile methodology, is a real theme. We have capabilities in centres across the region, including India, Australia, Korea and ASEAN. Our clients are immensely open to the process part of it.

For data, they are looking at what more data they need to go into the next phase, because you cannot use all of this data without the next phase of agile open cloud environment. It needs to be open. It needs to be secure. It needs to be scalable in this second chapter of the cloud.

You talked a lot about the second chapter of cloud. But in the fullness of time, do you envision entire IT infrastructures that we know of today moving completely to the public cloud at some point?

Green: Well, what we’ve seen in the first chapter is that some workloads and capabilities have moved to cloud, mainly public cloud. But we see that most clients have multiple clouds, multiple experiments and usage, and that many clients are not able to move their core workloads into a public environment.

IBM made the bet some years ago on hybrid cloud when no one was talking about it. Now, everyone is talking about hybrid cloud because that’s the way the market has experimented. As we move into chapter two, clients are looking at their core complex workloads and what they can continue doing in a public cloud, what things need to be in a secure hybrid cloud environment and what needs to be entirely managed in a private cloud. Clients are realising that being locked in to any one cloud provider is probably not in their long-term interest.

When you think about the world that came before chapter one, IBM ran the infrastructures of most of the world’s companies. Today, clients want us to be able to help them manage multiple clouds. They need to be able to deploy AI at scale, which is why we made the big announcement around Watson available anywhere, on any environment – on-premise and on any private or public cloud.

And as they move between different workloads and the different levels of cloud architecture, they have to consider any potential breachability, exposure and insecurity. We have the experience to help enterprises in those areas.

You talked briefly about Watson Anywhere. What took IBM so long, given that you were one of the forerunners in this space even before the current public cloud providers came up with AI services that they are now delivering through their platforms?

Green: I don’t think it’s about what took us so long. The issue is the rate and pace of evolution. We have thousands of pilots and work that clients have done using Watson. Now clients are beginning to want to be able to scale Watson as a set of processes they use across their business and across multiple clouds to achieve the sort of cognitive enterprise that they’re looking for.

To be a cognitive enterprise, you have to begin to experiment with Watson and see where AI works inside your organisation. But as you scale that up, you’ll need to have a hybrid cloud environment to enable scaling. So, I’m not sure it’s what’s taken us so long – it’s really about the fact that as the market and clients evolve, they want to be able to scale that across multiple clouds and we are ready to do that.

You could ask what has taken us so long to buy Red Hat? We’ve been talking about hybrid cloud for a long time. We saw that clients were using the cloud and the public cloud for certain cloud native apps, but that’s only 20% of the workloads that companies put into cloud.

I was with an airline client recently and they were talking about their core cargo apps and workloads, and how they could transition to a secure, open, entirely safe environment. So this is the evolution that IBM is making available.

This might be a little bit too premature for you to comment on, but are you able to share a little bit about what the Red Hat acquisition would mean for your customers in Asia-Pacific? I know the Red Hat guys quite well, and some of them are former IBMers as well.

Green: Yeah. And what are they saying?

To be honest, some of them are a little unsure about what it means for them, as with any acquisition. What would you say to them then, especially those who had left IBM to join Red Hat?

Green: It’s very important timing for Red Hat, which has been a hugely successful startup. As they looked to scale and invest in their business globally, they started to look at what partnerships made sense. Really, if you look at it, we are the ideal partner.

When compared with other cloud providers such as Microsoft and Amazon, IBM has been a leading contributor in many open communities: from Linux, to Java/Eclipse, to an ecosystem of strong partners. IBM’s and Red Hat’s partnership has spanned 20 years, with IBM serving as an early supporter of Linux, collaborating with Red Hat to help develop and grow enterprise Linux, and more recently to bring enterprise Kubernetes and hybrid multi-cloud solutions to customers. So why would we invest in such an extraordinary company and not allow it to be who and what it is?

So, Red Hat’s communication on the acquisition has been very much around the investment, the scaling, and the pure synergy of what we can do together. It’s a marriage that has been made in heaven and we need to ensure that we work together effectively. We have been a partner of Red Hat in our services. And we have already, as a major partner, been working to provide services and support to clients, along with other companies, not exclusively, and there is no friction in that provision of services.

So, for many, there’s a very good view of the future as we invest and scale. IBM has already invested over $40bn in five years to ensure that we’re a leader in security, blockchain and hybrid cloud, and Red Hat will be the beneficiaries of this. There’s enormous trust between the senior teams that will benefit clients.

Increasingly, many companies, including airlines, want to claim that they are technology companies and are trying to bring technology back into their organisations, rather than outsourcing it to someone like IBM. What are your thoughts on that?

Green: I see a CEO or meet with a board daily. The major themes on their minds are the ones that I've sort of shared with you, which is around equipping their companies with the necessary skills to navigate enormous changes in technology. What things do we do ourselves? What things do we get help from IBM and others? Which things are best done by specialists?

IBM is one of the very few technology companies that can provide the end-to-end capability for our largest clients, whether it is Westpac, ANZ Bank or Bharti, whether it’s pervasively encrypted, totally secure hardware, through to services, hybrid cloud, software and the AI to scale. Many clients find that that capability gives them enormous security and sense of confidence.

Other companies may say: “I want your help in how we scale AI and to do a full assessment of all of these AI pilots that we have and what the next step is in using the agile methodology. And then you do that for us, and where does that lead to?”

Other clients like FreshTurf might say: “We have a brilliant idea and we’re a startup – how do you provide us with the right technology and connect us to the wider ecosystem to enable us to be successful?”

It’s a marvellous time and we are having more of those discussions, but a client chooses. The great thing about IBM is that whether it’s around skills and the P-Tech education model, or around the process and how our client scales AI, or whether it’s around the next chapter of cloud, we can meet the smallest and largest needs.

One thing I would say is that for most of the really hard stuff – those core business applications that run a bank or an airline – IBM has supported those and will help clients in whatever way they need to transition them to a secure, hybrid multi-cloud environment.