CES 2019: Rometty Details the Value of ‘IBM Underneath’

NEWS ANALYSIS FROM CES 2019: CEO Ginni Rometty’s address was a refreshing departure for a conference that, in past years, has too often been a megaphone for trumpeting vapid trends and short-lived products. Rather, she spent her time on the CES stage detailing how consumer electronics, like many other industries, is on the cusp of fundamental changes enabled by new, foundational infrastructure technologies.

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By Charles King

LAS VEGAS—Keynoting the Consumer Electronics Show (CES) is a considerable honor, especially the opening session when the event’s tens of thousands of attendees (over 182K at CES 2018) and thousands of media members (6,600+ in 2018) haven’t suffered from days of crowded conditions, noise pollution, sleep deprivation and the food/drink for which Las Vegas is famous.

Microsoft had dibs on that prime spot for years, but since 2013 (after Steve Ballmer decided to walk away from trade shows), CES’ opening keynote has rotated among executives with deep ties to and associations with consumer electronics. That is until this week, when IBM CEO Ginni Rometty took the stage.

Why IBM? Good question, since the company isn’t exactly a household name for consumers. The company sold its PC division in 2005 and exited its work in gaming console processors (where it once held a silicon trifecta with Sony, Nintendo and Microsoft as customers) in 2009. Rometty acknowledged that point but noted that while consumers don’t know it, they rely on IBM “being underneath” a wide variety of services.

That’s an intriguing contention, and Rometty spent the rest of her keynote supporting her claim by detailing IBM’s pioneering advances in cloud, quantum computing, Watson artificial intelligence (AI) and blockchain, among other areas. She also enjoyed able assistance from executives representing name brand consumer-facing enterprises, including ExxonMobil and Walmart.

Let’s look at Rometty’s keynote and consider IBM’s value as the power “underneath” consumer, home and workplace technologies, products and services.

The End of Independent Personal Computing

CES 2019 is occurring at an interesting time for the consumer electronics and technology industries. At one level, consumer products from kitchen appliances to automobiles have never been “smarter” in the sense of being integrated with and enhanced by digital intelligence. But at the same time, those intelligence features have become increasingly abstracted from the devices themselves.

Consider the natural differences between 1990s PCs and today’s desktop and notebook systems—not in terms of computational power and performance but simply as devices. Originally, PCs were essentially independent in the sense of running programs and performing tasks without the assistance of other devices. That was also mostly true for networked PCs in offices and other workplaces.

The commercial internet changed that, along with consumer email, peripheral devices and other products. But the appearance of smart phones and mobility-enabled features increased the speed of the transition away from independence by orders of magnitude, as did cloud-based services, including automated backup for image, music and video files. Lightweight apps that have a fraction of the footprint and offer fractions of the capabilities of traditional software were another critical factor.

In other words, personal computing today is mostly about accessing external services, not running powerful applications. Just as importantly, the infrastructure supporting those services is essentially invisible, supported by systems housed in data centers located scores or hundreds of miles away from end users. So long as those systems are up and running, life is a dream. But if or when things go south, as they occasionally do, all hell breaks loose.

Many people understand this, and most associate these scenarios with cloud services from companies, including Amazon, Google and Microsoft. But what about the businesses that consumers depend on, and essential online services for consumers’ banking, shopping, travel and financial services needs? That’s what IBM “underneath” is all about.

The Value of IBM Underneath

Rometty’s keynote was enhanced by testimonials from executives from brand-name companies. IBM has long partnered with ExxonMobil on a range of initiatives and services. For example, IBM Cloud provides the foundation for the company’s Speedpass+, a personalization service that enables customers to pay for gas and car washes with their mobile devices.

During Rometty’s keynote, Vijay Swarup, vice president of research & development for ExxonMobil, discussed the company’s decision to sign an agreement with IBM to advance the use of quantum computing in developing next-generation energy and manufacturing technologies. By doing so, ExxonMobil will be the first energy company to join the IBM Q Network, a global community working to advance quantum computing and explore practical applications for science and business.

Quantum computing could help ExxonMobil address computationally challenging problems across areas, including optimizing power grids, performing more predictive environmental modeling and discovering new materials for efficient carbon capture. According to Swarup, “Quantum computing can potentially provide us with capabilities to simulate nature and chemistry that we’ve never had before.”

Charles Redfield, executive vice president of food for Walmart U.S., discussed the work the company is doing through Food Trust, an IBM initiative that focuses on using the company’s blockchain technology to transparently ensure food freshness and safety. The effort has attracted about 50 enterprises including Walmart, Carrefour and Kroger that share data about where they are sourcing and shipping fresh produce and other products.

As a result, if a safety issue arises (like the recent E. coli outbreak involving romaine lettuce), Food Trust members can more effectively identify and track potentially unsafe products and remove them before consumers are affected. For example, it used to take Walmart up to a week to track a package of mangoes back to its point of origin. Today, Food Trust’s IBM blockchain system allows Walmart to perform that same process in 2.2 seconds.

Final Analysis

ExxonMobil and Walmart provided just two of the highlights in IBM’s maiden CES keynote. Along with illuminating how IBM’s development efforts and technological innovations are helping their own companies, Swarup and Redfield also underscored Rometty’s statement about the critical value IBM offers and will continue to deliver to global consumers.

Rometty’s address was a refreshing departure for a conference that, in past years, has too often been a megaphone for trumpeting vapid trends and short-lived products. Rather, she spent her time on the CES stage detailing how consumer electronics, like many other industries, is on the cusp of fundamental changes enabled by new, foundational infrastructure technologies.

By showing what IBM is accomplishing with its enterprise customers today, Rometty offered CES attendees a look at the benefits they can expect to see and enjoy in the near future.

Charles King is a principal analyst at PUND-IT.  © 2018 Pund-IT, Inc. All rights reserved.