AU - ibm innovation quitzau 30 04-2015

© 2015 IBM Corporation

Innovation @ IBM - Anders Quitzau, innovation Executive

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April 2015


Innovation@IBM

IBM’s definition of innovation

§  Intersection of invention and insight § Creates value

§ Holistic view – Business model – Products & services – Operations


Innovation@IBM

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Innovation@IBM

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IBM’s early days....


Innovation@IBM


§  Exited commoditized businesses: – PCs and small servers – Hard disk drives – Printing Systems – Network

§  Created a partner world of more than 100K partners: ISVs, VARs, resellers, developers, CSIs §  Platform Strategy

§  Strengthened position in: – Business Consulting – Analytics, cloud computing, Social, security and Mobile – Open, modular systems

§  Acquired 160+ companies in last 14 years – to complement and scale our portfolio of products and offerings

§ Transformation to cloud – changes revenue model § Revenue of $99.7B § Record net income of $16.4 § Growth markets accounted for approx. 23 % of IBM’s total

geographic revenue § More than 6.800 US-patents § 197 BUSD market value

– New EPS record 16.3 $ in 2013 – $10.55B in Free Cash Flow generated in 2013 – Returned $18 B to shareholders

IBM’s Ongoing Transformation Journey Remixed our portfolio toward services, software, and integrated solutions…

Key figures

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Innovation@IBM

Recent historical highlights 2002

Sharing & partnering

The “Smarter” phase of our transformation is underway

2010

Making things smarter

§  Instrumented, interconnected, intelligent

§  Enable growth and productivity

§  Optimize the whole system

§  The Social Business

2006

Globally integrating

§  Right skills, right place, right cost

§  Rationalize support functions for greater efficiency

§  Radically simplify processes

§  Consistent set of processes worldwide

§  Leverage best practices

§  Standardize and reduce waste

§  Governance and performance discipline

Cognitive Computing

§  NLP, Machine learning

§  Computing on humans’ terms

§  Game changer

2013


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How do we capture new innovative ideas? Internal & External Sources for New Idea Generation

Internal Sources

External Sources

Source: The Global CEO Survey 2006


Innovation@IBM

Real-time analytics

Financial governance

Governance, compliance, risk management

Financial risk management

Data and document capture

Data warehouse appliances

Cloud-based analytics

BPM for LOB

Security intelligence

Social enterprise management

Cloud integration

Business Need Acquisitions since 2010

Capitalize on big data to know and act

Engage customers, citizens and employees as individuals

Speed delivery of new products and services

Enterprise asset management

Network automationUse cloud to drive strategic change

Protect the brand and future

Engage anyone, anytime, anywhere

Customer experience management

Incentive compensation and sales performance

management

Application development

Information lifecycle governance

Endpoint managementData analysis and migration

Cloud-based recruiting and talent management solutions

Automated business analytics

Information optimization

Master data management

Web analytics

Software testing for complex systems

Mobile management and securityMobile computing platform Mobile messaging

Cloud computing infrastructure

Advanced threat protection

Document and image viewing

Procurement and sourcing

Enterprise marketing managementB2B integration

Threat analytics

High-speed file transfer

Acquisitions increase the value we offer clients and accelerate our moves into fast-growing markets – since 2000 160+ SW acquisitions + cloud centres

Legal Information governance


Innovation@IBM

Innovation is about people – Getting ideas on the table – and implementing the best


Innovation@IBM

§  Technical §  Business

We Embrace Collaborative & Open Innovation

Enabling culture change

§  Established an innovation agenda that spans multiple dimensions:

–  Product –  Services –  Business process –  Business model –  Management and culture –  Policy and society

§  Enabled global collaboration –  Culture of collaboration –  Innovation ecosystem

§  Build Excellence in acquisitions

Why? What we’ve done §  Become our clients’ “innovation partner” –  Address client priorities –  Build deeper client relationships

§  Respond to changing nature of innovation §  Organizations need each other to be

successful –  Pace of innovation outstrips an organization’s

ability to “go it alone”

§  Changing workforce dynamics –  Globalization –  “Millennials”

Venture Capitalists ISVs Business

Partners

Universities

Community Leaders

CompetitorsEmployees

Regulatory Bodies

Investors IT Analysts

Alumni

Standards Bodies

Policy- makers

ClientsInnovation Ecosystem

“We opened up our labs, said to the world, ‘Here are our crown jewels, have at them’. The Jam -- and programs like it – are greatly accelerating our ability to innovate in meaningful ways for business and society.” - Sam Palmisano, IBM CEO


Innovation@IBM

Ideas source:Internal, partners and customers

Weeks to m

onths

Breadth

Today – As is

Solution

Solution

Solution

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Fail many, but fail cheap - Our Philosophy of Innovation

Service Service Service

Yesterday – as was

idea

Service

18 months to 2 years

Ideas source:Internal

§ Use of exposed common capabilities to enable rapid service assembly

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§ Larger variety of compelling offerings to offer customers

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idea idea

idea

idea idea idea

idea

idea

idea idea idea idea idea idea idea idea

§ Ideation and Product Inception from the expanding source for innovation

§ Use Collaborative tools to solicit interactive feedback.

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§ Limited community to foster new innovation

§ Little user interaction and market feedback

§ Service silos § Limited reuse

§ “Build it and they will come” approach

Solution


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Idea management models


Innovation@IBM

© 2013 IBM Corporation13

IBM-led Innovation

External-ledInnovation

Involvement ofExternal Partners

l  IBM Applied Research Projects

l  Emerging Business Opportunities

l  TAP / BizTech

l  Seed-stage Startupsl  First Of A Kind

l  IBM IndustrySolutions

l  IBM BusinessPartner Solutions

l  IBM Research Services

l  Ideahub

l  Product & Service Offerings

l  Idealabs, Jams

“Bleeding Edge”

GenerallyAvailable

l  University Programs

l  Extreme Bluel  Startups / Entrepreneurs

l  VC Backed Firms(Late Stage)

Maturity of Tech-nology/Solution

l  Academy of Technology

l  IBM Institute for Business Value – studies and PoVs

l  IBM Basic Research Projects

l  IBM / Client Joint Innovation

l  Acquisitions

l  AlphaWorks

l  CIO-fund

IBM’s innovation portfolio reflects the tremendous creativity and contributions of many organizations – both within and outside IBM


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Innovation Enablers

§ Open & transparent business strategy

§ Permission and alignment

§ Collaboration tools

§ Communities of early adopter

§ Employee awareness & education

§ Agile, speedy funding programs

§ Social networks


Innovation@IBM


Innovation@IBM

Front end innovation as a dynamic, core discipline at IBM I N

S I

D E

O U

T S

I D

E

Partners

Clients

Internal Stakeholders

IBV & CAI studies

Global Technology

Outlook

FOAK

Mobilize Interest, Collaborate

Mobilize Interest, Collaborate

Incubate, Prototype and Validate

Identity Challenges/Create

IdeasImplement, Take

to Market

IBM Lines of Business

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IBM Research

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Innovation@IBM

IBM’s research and developmentIBM is 22. year in a row leading the way in

IT-research by having: – a yearly R&D-budget of six billion dollars – over 3.000 researchers, scientists and

engineers – five Nobel prize winners – eight research laboratories in six countries – 24 development laboratories worldwide IBM has the most IT-patents in the world: – In 2014 IBM beat its own record with 7.534

patents and can call itself world champion in ”most granted patents.”

– Over 50.000 active patents globally IBM’s number of non-IT-related patents is

growing: – Patents regarding organizational-

development, solutions and business processes

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IBM Research Labs

IBM Research – “The World is our Lab”

China

Watson Almaden

Austin

Tokyo Zurich

India

Dublin

Australia Brazil

Africa §  Next Gen Public Sector §  Water & transportation§  Human Capacity Development

§  Natural Resources§  Disaster management§  Healthcare/Life Sciences

§  Natural Resources§  Smarter Devices§  Human Systems/Events

§  Analytics & Intelligence§  Systems &Software§  Industry research

§  Internet of Things§  Big Data / Analytics§  Enterprise Cloud Services§  Energy, Commerce, Traffic

§  Big Data Analytics§  HW & SW Quality§  Cloud§  Mobile

Haifa

§  Smarter Cities§  Analytics

§  Services §  Big Data Analytics§  Front Office Digitization

§  Semiconductors§  Systems§  Software§  Services§  Analytics

§  Semiconductors§  Processors

§  Analytics§  Storage §  Nanotech

Healthcare

§  Nanotech§  Security§  Business

Analytics§  Systems

Industry Solution Lab

IBM Research

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IBM Research: Collaborative Innovation

China

WatsonAlmaden

Austin

TokyoHaifa

Zurich

India

IBM Research Lab

Global, Smarter Planet Collaborations

Pangoo


Innovation@IBM

Invention by ‘luck’ still happens


Innovation@IBM

Taking big data to the extreme


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We engage in public/private partnerships, like the EDISON and ECOGRID projects on Bornholm

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§  Total budget: 24 million Euro (EU funding 13 million Euro) §  IBM: 171 man months, around 2.2M DKK of servers and

other equipments, IBM SWG products (ILOG, WAS, MQ, DBMS)

§  Demonstration > 50 % of budget (excl. replication/deployment)

§  A large scale demonstration of a real-time market place for

distributed energy resources §  A demonstration of a real power system with more than 50

percent renewable energy

§  To implement ICT systems and innovative market solutions - offering TSOs additional and more efficient balancing services

§  To enhance small consumer and local producers to participate in the power market through real-time operation, energy storage and savings

§  To make a prototype solution for Europe - offering a “fast track” option towards market-based Smart Grids in Europe


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Social - in everything - collaborative, transparent innovation


Innovation@IBM

Social software is today the backbone in IBM’s open innovation endeavors

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Innovation@IBM


Innovation@IBM

We often run ‘mini-jams’ using IBM Connections idea-widget to elicit ideas for innovation workshops with customers

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Expanding our Innovation Eco System - outside the firewall

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IBM Watson: From Grand Challenge through Innovation to solutions – like a startup


Innovation@IBM

The Watson Ecosystem is a ground breaking new innovation model to scale transformational cognitive computing fast

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© 2014 International Business Machines Corporation

The Ecosystem: Delivering the cognitive experience to the masses

million equity investments

subject matter experts

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Watson Developer

Cloud

Watson Content

Store

Watson Talent Hub

+ +Tools and APIs enabling

ISVs with self-service training, development, and testing of their cognitive

application.

Brings together sources of free and for-fee data, including general knowledge, industry-specific content, and subject

matter expertise to help power Powered by Watson apps.

Helps to bridge ISVs’ resource gaps by providing a marketplace for skills like linguistics, natural language processing, machine

learning, user experience design, and analytics.

engaged innovators

6000 +


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Revenue Growth

GoTo Market activities

Strategic insights

IP Acquisitions

Expanded ecosystems

Credibility & visibility

Infrastructure

Portfolio Gaps

addressed

IBM

Start-ups

Expertise

“Gets”“Gives”

IBM work with start-ups in the IBM Global Entrepreneur Program


Innovation@IBM

§  Promising software programs in research not yet commercialized.

§  Outside companies and developers contribute valuable ideas about bringing them to market.

§  First-cut versions of research technology available for free trial attracting thousands of early adopters, innovators, and entrepreneurs to site.

§  40% of technologies on the site graduate into IBM products or industry standards.

AlphaWorks - Speeding IBM Emerging Technologies to the outside early-adopter community


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378,000+ (*including Alumni)

39,000+ users, 500+ IBM groups (65% outside the US)

80+ accounts using “IBM” in the name (25% from outside the US) – over 3,000 IBMers on Twitter200+ IBM channels

75,000+

100,000 IBMers collaborating with 200,000 non-IBMers

166 communities, 200+ blogs, 5000+ profiles

Social Media Outside the IBM Firewall examples ( incl Alumni)


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•  IBM Research •  Global Innovation Outlook •  Collaborative Innovation with IBM •  IBM Institute for Business Value •  IBM Smarter Planet •  First-of-a-Kind Projects •  IBM Jams •  Technical Exploration Centers •  IBM Innovation Centers •  IBM Software Labs •  IBM Systems & Technology •  IBM Design Centers •  IBM Benchmark Centers •  IBM Executive Briefing Centers •  IBM Watson Ecosystem •  Innovation Discovery •  IBM Global Entrepreneur •  IBM Voices (social media agregator)

External web pages

Wider IBM Resources

IBM Research

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Anders Quitzau Innovation Executive [email protected] +45 2880 4705 about.me

@Anders_Quitzau Anders Quitzau AQuitzau Aquitzau

AU - ibm innovation quitzau 30 04-2015

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