$IBM and the enterprise AI opportunity

It was a bit of surprise to me when I heard Chamath Palihapatiya a month ago on CNBC, roast IBM as a joke on the topic of AI.

There’s no doubt that IBM is not the sexiest company in tech right now and it’s an easy target for bullying. But anyone who has spent some time on cloud-based AI platforms will admit IBM has one of the best offerings in the market right now. IBM’s acquisitions of SoftLayer, AlchemyAPI, Cloudant put them in a strong position in terms of cloud and AI, but especially the intersection of the two.

Google, Amazon, and Microsoft may have more popular cloud platforms, but none of them have nailed it with serving AI yet. Amazon has just started. Google and Microsoft were not offering GPU machines just as recently as a quarter or two ago. Google’s AI APIs still create confusion and Stack Overflow is full of unanswered questions. On the flip side, IBM has had the most powerful image classification, NLP (natural language processing) algorithms as cloud APIs for the longest time, and they work quite well.

Enterprise AI is a real opportunity. Given IBM’s existing footprint as a top vendor with Fortune 500 and global conglomerates, and this new array of AI services, I do think IBM has an edge in this war.

This infographic from CBInsights also indicates IBM was the first to wake up to this opportunity – excluding Google, which has been predominantly a consumer AI company since its inception.

(But perhaps the more worrisome take is not to see HP on this list, which was supposed to focus on software, but I digress.)

Nevertheless, for IBM to win in enterprise AI, it doesn’t have to have the best and brightest AI technology (which is a commodity anyway, thanks to libraries such as Caffe, Torch, Tensorflow that are all open source). Enterprise sales is a business of trust and relationships. It took a concept change (namely SaaS) for new enterprise software companies to crop up again, years or decades after the big five, IBM, HP, Oracle, Cisco, Microsoft, and Cisco.

Last but not least, IBM’s bet for the future is not only in enterprise AI, but they are also working on enterprise blockchain as Arvind Krishna puts it. Hence, in my opinion, IBM is still a serious contender in this new era of enterprise technologies. However, I must agree with Chamath that Watson is perhaps not the best choice in regards to branding. But he should give them credit doing a better job than Salesforce per se (Einstein!?)


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