IBM 2015 Annual Report Download - page 25

23
Management Discussion
International Business Machines Corporation and Subsidiary Companies
Cognitive Solutions
Since 2011 when IBM’s Watson was introduced, IBM has been
developing a new generation of cognitive systems that can see
and analyze the massive amounts of data that have previously
been invisible to computers and enterprises. Cognitive systems
have the capability to inject a kind of thinking ability into every
digitalized object, process and service. IBM is on the forefront of
deploying these systems and assisting clients to become truly
Cognitive Enterprises.
Cognitive systems are not programmed; like humans, they
learn from experts, from every interaction, and from big data. They
are enabled to learn by using advanced algorithms to sense, pre-
dict and infer. Ultimately they can augment human intelligence,
allowing individuals to make more informed decisions.
For the past five years, IBM has continued to invest in Watson,
including dedicating $100 million to venture investments to support
start-ups building cognitive apps through the Watson Developer
Zone on Bluemix. IBM is also making Watson more widely available
through the Watson Ecosystem, which has grown to more than
500 partners.
Paired with Watson is the company’s core big data and ana-
lytics business. IBM has invested over $15 billion in these areas
since 2010, including over $7 billion on more than 20 acquisitions.
Nearly half of IBM Research’s spending is focused on analytics
and cognitive.
IBM’s leading-edge cognitive technology is only the starting
point. The company is developing entirely new solutions busi-
nesses around that cognitive capability. In 2015, the Watson
Health unit was formed, which is IBM’s first business unit designed
around a single industry. Watson Health will create cognitive
solutions that can better help doctors diagnose and anticipate
disease; it will recommend treatments that are tailored to individ-
uals; and it will assist researchers to predict and prevent the next
generation of diseases.
Another set of cognitive solutions IBM is building is the Internet
of Things (IoT). It is estimated that there are more than 9 billion
connected devices operating in the world today, generating
2.5quintillion bytes of new data daily. Watson IoT will bring the
power of cognitive to the challenge of extracting and analyzing
data embedded in intelligent devices in real time. In addition,
the recent closure of The Weather Company acquisition essen-
tially expands the company’s IoT platform; with one that collects,
integrates and analyzes data from three billion weather forecast
reference points, including satellites, weather stations, airplanes,
consumer apps and more for IBM and our clients.
Through Cognitive, IBM is ushering in a new era for the industry
and for clients.
Cloud Platform
Cloud is at the heart of the “digital” revolution. No enterprise is
untouched by this revolution and the shifts are occurring rapidly.
Enterprises are benefiting from cloud by using it to transform
their information technology (IT) and business processes into dig-
ital services. Cloud brings two compelling sources of value:
• Innovation: In addition to cloud enabling the sharing of
infrastructure, the real promise of cloud is innovation. By
forcing greater levels of standards throughout the technol-
ogy value chain, new products and services, and even
entire business models, can be created in weeks rather
than months or years.
• Hybrid: Data, cloud and engagement are powerful forces
changing the landscape of technology and businesses.
Enterprises need to bring this new world of technology
together with their existing systems in order to capture their
full value. Hybrid cloud brings together the back-end systems
infrastructure with the new strategic imperative “digital”
technologies. Unless the new and traditional IT worlds
are brought together, they will be isolated within the
enterprise. IBM servers and storage can handle mobile
transactions, compose and expose APIs and integrate
across hybrid clouds to unlock new value from data.
Making applications work across on-premise, public and private
cloud environments is what hybrid cloud is all about. This requires
a deep understanding of both traditional and new IT models,
something that IBM is unique in bringing to its clients:
• In traditional IT, for example, the z Systems mainframe is
used by all of the top 25 global banks and almost three-
quarters of the top 25 U.S. retailers. In addition, 70 percent
of the top 25 Fortune 500 companies rely on IBM to manage
their critical IT infrastructures.
• In the new world of IT, the IBM Cloud has become the stan-
dard for enterprise-grade cloud—bringing performance
and the integration across all IT. The company continues to
build cloud into Global Technology Services’ (GTS) large
base of outsourcing relationships.
• Each of these areas of IT requires uncompromising security.
IBM Security brings to clients advanced technologies in fraud
and threat protection, identity and access management,
application and data security, mobile and cloud security.
IBM’s systems are among the most secure in the world with
advanced encryption, threat monitoring and tracking and
behavioral analytics. Further, high-end security consulting
brings the expertise of 6,000 dedicated security specialists.
Built on big data analytics, IBM manages over 20 billion
security events per day on 2.5 million desktops for 12,000
clients through its Security Operations Centers.