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1. IBM – The Next Chapter Summary: IBM is in the midst of its riskiest transformation in decades, investing in innovative technology, such as artificial intelligence, blockchain, and quantum computing, in a bid to become the tech industry’s “incumbent disruptor.” Unveiling their plans at the recent IBM Think 2018 conference, CEO Ginni Rometty outlined how her company plans to surpass Metcalfe’s Law and lead the tech sector are based on 4IR and business-led innovation. Headquartered in New York, IBM operates in over 170 companies and is the 7th largest employer in the US with over 380,000 employees. With a 2017 turnover of $79.14, IBM used to be the single biggest component of the S&P 500, according to data from Silverblatt, making it the index’ most valuable company. However, whilst it remains a tech heavyweight, over the past few decades, its competitive edge has eroded. IBM is currently navigating its riskiest transformation in several decades, investing in innovative technology, such as artificial intelligence, blockchain, and quantum computing, in a bid to become the tech industry’s “incumbent disruptor.” At the recent IBM Think 2018 conference, CEO Ginni Rometty presented her vision to lead IBM back to the top of its game. Where IBM has previously struggled to create value, a strategy based on delivering cutting-edge technology is primarily about addressing efficiency and productivity to drive value. Fundamental to the change of direction is her belief that “when you learn exponentially, you become the disruptor, instead of the disrupted”. At the conference Rometty explained that as a large company, IBM realises that being ‘disrupted’ is par for the course in the tech sector, but by lagging behind, its competitive edge, bottom line and ability to innovate effectively are all threatened. Seeing the potential of the Fourth Industrial Revolution (4IR), Rometty plans to ensure IBM stays ahead of world-changing trends that each promise exponential growth, not merely keep up with developments as they occur. She plans to lead the way in the digital world, to put IBM back in front. Data is at the core of IBM. It infuses every activity, from R&D to customer service and throughout its supply and value chain. Key to the delivery of Rometty’s transformative strategy is leveraging ‘deep learning’ technology and utilising its Watson artificial intelligence (AI) engine to drive new products, services and approaches. AI has already infused the IBM Cloud, a general purpose ‘cognition platform’ that is helping IBM evolve in to an industry disruptor. Whilst the potential of driving AI platforms and technologies forward are well publicised, Rometty realises that AI-driven disruption comes with risk. She said; “AI will impact all jobs. With every era of technology, new jobs are created and others lost.” In acknowledging the impact AI will have on the workplace, she is already retraining and repositioning employees for ‘AI-augmented work’, defining this shift as “New Collar”, or, the ability to work with technology in everything you do. Fundamental to the success of the new direction is overcoming previously understood barriers to tech innovations. In essence, breaking the rules to become the ‘disruptor’ they aspire to be. In 1976, Bob Metcalfe, the inventor of Ethernet, connected office terminals and began the networking standard that now dominates our networks. In creating a new way of working and living, he understood that

2. that the power of a network grows by the square of the number of connected nodes, creating an eventual tipping point, one that has previously limited application of cutting-edge technology. In finding a way to break through the tipping point using AI and blockchain technologies, IBM is unlocking unstoppable commercial potential. They are already commercially promoting blockchain technologies that allow customers to digitally track food safety, solve financial disputes, securely exchange health data and manage global supply chains. As Frank Yiannas, Vice President of Food Safety for Walmart explains, “We’re not chasing blockchain as the new fad, we’re solving problems of the business.” Success is far from guaranteed, but it is the beginning of our understanding in how to reach the full potential of the latest technological developments. Once IBM helps to structure a new way of thinking about networks in these two industries, it will spell the beginning of exponential growth in AI technology. Another area IBM is tackling is that of Quantum Computing. Shifting from the realm of science fiction to science, the company is focusing on leveraging the quantum properties of matter to create entirely new types of computing. During the IBM Think 2018 conference, they showcased IBM Q, a collection of working quantum computers that are up and running in the IBM Cloud, for anyone to program. IBM Q is exciting as it provides a glimpse into how to program systems in an entirely different way and through entirely different skills from programming a classic computer. Robert Sutor, VP of IBM Q Strategy and Ecosystem explained that in IBM Q “the algorithms are completely different” and therefore programmers are having to develop an entirely new language to begin to tackle problems. Due to the requirement to entirely relearn and redesign the programming approach to utilise quantum computing, its practical uses are still being discovered. However, putting technology in the hands of developers is a key milestone not just for IBM, but also for the embryonic quantum computing industry as a whole. IBM has a clear direction for its quantum computing strategy. They believe that in the early 2020s, they will be able to demonstrate examples of ‘quantum advantage’, solving business and industry problems that were previously impossible. IBM is at the beginning of a slow and steady shift in gear to reclaim its place at the helm of the technology industry. Whilst there is clearly more to do to achieve this vision, their investment in AI is already yielding results. The risk taken with blockchain and quantum computing as the company’s future strategy plan, looks promising. By understanding that in order to compete, and indeed lead the industry, technological innovation and managing risk are both key, Rometty has set IBM a tough challenge, but predicting the potential of the Fourth Industrial Revolution, there is no other option.