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In her first public speech since becoming CEO of IBM, Virginia “Ginni” Rometty showed the world what IBMers have known for years: That she is a force to be reckoned with.
A poised and polished Rometty spoke at a meeting of the Council on Foreign Relations (CFR) in New York City March 7 and discussed the use of big data and the ways in which organizations are learning to compete in a new landscape. Appointed president and CEO effective Jan. 1, 2012, Rometty is IBM’s ninth CEO and the company’s first woman chief executive.
Rometty delivered IBM’s message on big data, but as the event was dubbed “A Conversation with Ginni Rometty,” she gave about 10 minutes of formal speech and then sat down to talk on a variety of subjects, including education, immigration, cyber-attacks, politics and more with Richard N. Haass, president of the Council on Foreign Relations.
To start, Rometty cited three “vignettes” including the Memphis police force reducing crime, a Mexican cement maker tapping social media for success and the presidential campaign being able to predict outcomes as seemingly “random unrelated” things. However, she said, “These things are examples of the same phenomena,” and that is big data. That is how organizations will compete from now on, Rometty said.
“Data will be the competitive advantage for any business,” Rometty said. “Data is going to be the next natural resource.” She added that data will change how organizations make decisions, how they create value and how they deliver value. “Things will be based on predictive analytics, not on gut instinct.”
IBM has been at the forefront of the big data and analytics push in the industry, investing heavily in building up a portfolio that others might covet. IBM’s big data strategy has included the expansion of R&D, acquisitions and business initiatives across its software, hardware and services portfolio. In the last five years, IBM has invested more than $16 billion in 30 acquisitions to boost its big data analytics portfolio, so when it comes to big data, Rometty knows from which she speaks.
Rometty said access to more and better data will help remove biases organizations have. Moreover, as the world becomes more social, “Your value will be not what you know, but what you share,” she said. “You’ll be rated by the information you create. … What you will see with the emergence of big data, social and mobile is you will see the death of average, and you’ll see the era of you.”
Indeed, the confluence of cloud computing, mobile, social and big data is happening so fast that it is forcing new ideas and new ways of doing business. “This is changing the front office of the company, especially professions like marketing,” Rometty said. “Marketing is going to be the steward of the culture of a company.”
IBM CEO Rometty: Big Data Is Job No. 1
Rometty delved into the IBM theory that this is the third wave of technology. The first wave was the era of tabulating systems or computers that counted things; the second was the era of programmable systems or computers that did what people programmed them to do.
Now, with the advent of big data, the world is in the era of cognitive systems or computers that are able to learn, like IBM’s Watson, which Rometty said she thinks will be one of the greatest contributions IBM will make to the world.
“Watson’s been to medical school, and we taught it oncology,” she said.
IBM has teamed with several medical institutions to make Watson into an advisor to doctors fighting cancer. The cognitive system also has been applied to financial services and at telcos for call center operations.
Asked whether IBM is able to compete with tech companies in Silicon Valley for some of the bright minds coming out of the top schools, Rometty said, “People come to IBM because you can work on some of the world’s biggest problems. And we have the last commercial research organization.”
Rometty also addressed broader problems like immigration reform and stated that the need for more folks with math and science backgrounds makes reform a necessity. Yet she also spoke of how IBM is empowering students in schools here in the U.S., including schools in tougher parts of cities like New York and Chicago, to graduate with technical skills.
She also hit on corporate taxation and U.S. companies’ investment in facilities in other countries. “You have to have the ability to move your capital around,” she said.
Rometty also voiced concern about cyber-attacks, particularly state-sponsored attacks. It is a “big data analytics problem,” she said, where you look for things out of the ordinary like footprints in the sand. She said “information sharing without liability” could help in dealing with this problem.
IBM has been increasing its investment in Africa over the years. Last year, the company opened a research center in Nairobi, Kenya. “Originally the way research worked at IBM is we’d open up next to a very prestigious university,” Rometty said. “But back to big data, you have to open up a research center in the middle of a problem. That’s what took us to Nairobi.”
Rometty also noted that Africa is not one cohesive continent but 54 separate nations, each with different political climates that may not be so business-friendly. “We’re in 24 [African] countries today,” she said. “There is great opportunity there. We believe strongly that this is the time.”
IBM has been ramping up its profile on the continent as part of its focus on emerging markets. The expansion program is part of a major business plan to increase IBM’s presence in growth markets and support global strategy. The company sees the potential of research and smarter systems in transforming business, government and society across the continent.