Think 2021: AI and automation dominate IBM’s growth strategy

During IBM’s Think 2021 event, the company discussed how hybrid cloud operations and artificial intelligence (AI) are essential to its strategy and the digital transformation of its customers. CEO Arvind Krishna spoke about how these elements are helping customers to emerge from the pandemic as more resilient, agile businesses.

The event underlined many aspects of IBM’s strategy, including its intention to become a platform company, underpinned by its Red Hat OpenShift and systems infrastructure, Watson AI and automation solutions, and a partner community that brings industry-specific solutions.

But AI and automation stood tallest this year, indicating that IBM believes these converging areas represent its biggest prospects for growth in the coming years.

Expectedly, AI permeated almost every session, but automation took a more prominent role this year as it forms an increasingly important theme for IBM.

The seeds were planted at Think 2020 with the release of Watson AIOps, which has had a good market reception since launch. But after several acquisitions in the past few months, IBM is now making a much bigger statement of intent on the opportunity presented by automation products.

In April 2021, it acquired myInvenio, an Italian process-mining software company, and Turbonomic, a provider of application resource management software. In November 2020, it bought Instana, an application performance monitoring and observability firm.

Insights from IBM Think 2021

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Businesses have been forced to work smarter over the past year, bringing automation further up the agenda. This has encouraged IBM to continue to infuse AI into its products to support this need and to drive greater economic value from its technology. Although automation isn’t new, the role that traditional, rule-based systems such as robotic process automation are now playing as they converge with AI is opening doors for IBM in intelligent automation of workflows and business processes.

One of the announcements in this area was support for AutoSQL in Cloud Pak for Data, allowing customers to automate access to data for AI processing, wherever and however the data is stored, without having to move it. IBM takes pride in its data-centric approach to AI, embodied in its slogan “You can’t have AI without IA [information architecture]”. The area is ripe for automation given that data scientists spend as much as 70% of their time on mundane, low-value but essential data tasks.

The headline move was Watson Orchestrate, an interactive, AI-powered assistant that uses a library of AI skills, including natural language processing and connections to third-party applications such as Slack or Workday to automate employee workflows.

IBM’s stated goal for Watson is to make it “the most open and scalable AI platform for businesses”, but for it to reach this goal, it must become a tool for a wider set of employees, including knowledge workers. IBM is betting that its strength in natural language processing through initiatives such as Project Debater, its expertise in business processes and automation, and the help of partners such as Slack and Salesforce will help make Watson more of a tool for everyday employees, or what the company calls the “last mile” of users.

This year, 12 months on from unveiling its vision, there is much more meat on the bones of IBM’s hybrid cloud and AI strategy. Examples from several customers and partners were highlighted throughout the keynotes to illustrate this, including: Siemens Digital Industries, which is using IBM’s hybrid cloud infrastructure to enable closed-loop digital twin solutions in its factories; CVS Health, which is using IBM Watson for virtual agents in its contact centres; and longstanding ally Salesforce, which reinforced IBM’s strategic partnering efforts.

As in previous periods during its 110-year history, a “new IBM” is crystallising under the stewardship of Arvind Krishna. In an unprecedented pandemic year, the past 12 months have been immensely transformational for IBM as well. The company has unveiled a new vision, made eight acquisitions to support its strategy and spun off its managed infrastructure services business into a new entity, dubbed Kyndryl. Above all, Think 2021 reflected this continued transformation.

IBM is becoming much tighter in its positioning, market differentiators and storytelling. With Covid-19 forcing enterprises globally to prioritise resiliency, industry-driven solutions, automation and modernising their infrastructure, these improvements have bolstered IBM’s position as a trusted provider of mission-critical technology for enterprises.

However, a year into Krishna’s reign, the report card is mixed. It is still not clear how its strategy will generate the revenue growth that it desperately needs and that its main cloud rivals currently enjoy.

All eyes are on Big Blue to see how these moves bolster its growth in 2021 and beyond.

Nicholas McQuire is chief of enterprise research at CCS Insight.