Growth markets a "tremendous value" for IBM - senior VP

- Thursday, May 5, 2011

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Together with software, analytics, the smarter cities and smarter planet initiatives, and cloud computing, the growth markets - which include Latin America - represent "tremendous value" for IBM (NYSE: IBM), the company's senior VP for global business services, Frank Kern, said during a presentation.

The executive - who highlighted the company's achievements in the framework of its 100-year anniversary this year - underlined the importance of change and adaptation as globalization is driving business and the worldwide workforce. "I don't know where we'll be in five or 10 years, but we always move to value," he said.

Reflecting back on the company's 100-year history - when IBM went from producing scales and clocks, to tabulating machines, to traffic signals and PCs, to an IT software and services company - Kern said three things have been constant - innovation, which embraces change and developing new ideas; the ability to lead large-scale transformations, such as in the 1990s when the company had to redefine itself and invested several billion dollars in software firm acquisitions, and then sold its PC business to China's Lenovo in late 2004; and a willingness to change everything except the corporate core beliefs and values.

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"Today's forces of change being applied force us to keep changing," he said. "Companies aren't permanent structures."

"Corporations are expendable," the VP said, quoting IBM's second CEO, Thomas Watson, Jr. "Success... can slip out of hand."

Corporations need to keep contributing and changing, and "growth on planet Earth is in growth markets. Developed societies are very rich, but it is kind of over for them," Kern added, referring to those countries' ageing population and spiraling debt. "If you want to grow, you need to go global."

And for companies to achieve global growth, technology is becoming ever more critical to manage an ever more complex business, he noted.

One area where IBM is innovating is in a question-answering, self-learning computer dubbed Watson, named after IBM founder Thomas Watson. The hardware is actually 2,800 computers running at the same time on IBM Power7 processors through artificial intelligence, which 25 PhDs have developed over four years.

Watson has played on US TV quiz show Jeopardy and has come up with probable sicknesses based on the input into its system of the symptoms. In one case in the US, in three seconds Watson came up with five probabilities of a woman's sickness; where as it had taken her specialist doctor four months to define the two maladies that had affected her - rickets and vitamin D deficiency. Watson listed rickets as the second probability and vitamin D deficiency as the fifth.

"And 10 years from now, you'll fit Watson in your hand," Kern said.