IBM draws a red line

The Big Story

IBM doubles down on OpenShift

Under CEO Arvind Krishna, IBM is in the midst of the biggest transformation in its 109-year history, doubling down on the hybrid cloud and artificial intelligence.

As part of that overhaul, the company is drawing a new red line. All new products must be built on OpenShift, the company's open-source developer platform it acquired with its $34 billion purchase of Red Hat in 2019.

• "We will not build any software in IBM that does not run on OpenShift," SVP Rob Thomas told Protocol. "It's a clear statement of what's important."
• The move reflects the company's broader focus on hybrid cloud. And IBM will still have some legacy products that don't run on OpenShift. But it's moved important software like DB2 and WebSphere over to the platform.
• "It's a unique play for IBM because … we've got more contributors than anybody in the world from a company perspective on open source," said Thomas.

That mandate is having a broader impact within IBM. The company used to do the majority of its sales directly to customers. Now, it's trying to build out a bigger partner ecosystem.

• "We realize we are going to need to be doing half of our revenue through partners or with partners," said Thomas.
• One of those is with Palantir, the controversial data analytics firm that's backed by prominent investor and Trump ally Peter Thiel. Under the initiative, Palantir will build its flagship Foundry product on IBM's Cloud Pak for Data, which runs on OpenShift.

AI remains a focus for IBM. And if anything, the OpenShift mandate helps there, since AI and machine learning are among the workloads OpenShift is designed for. The company plans to continue to double down on three keys areas: natural language processing, trust in AI and automation.

• "Being the best in those three domains, that has a lot of runway in AI as it's applied to businesses," said Thomas.
• Still, there are signs that some of IBM's more ambitious AI projects haven't produced the value the company was hoping. It's reportedly shopping around its Watson Health division for a potential sale, per the WSJ.
• The company is also working to translate some of its more high-profile AI research into commercially-viable technology.
• IBM's Project Debater, for example, uses semantic understanding to debate humans. Now, it's trying to bring that technology into the enterprise product suite.

IBM still has a lot of work to do. For one, it still hasn't come up with a name for the managed infrastructure business it spun off in 2020. (It's still the cringe-worthy NewCo.) But more deeply, the company has to convince customers that IBM, a company that has struggled to remain relevant in the modern cloud era, can provide the flexibility that larger vendors like AWS can't. That could get harder as the hyperscalers also embrace a multicloud model.

— Joe Williams

A MESSAGE FROM INTEL

"We're moving faster now than we've ever moved, and we'll never move this slow again." ICYMI, catch a glimpse of what the future looks like for developers in this Protocol interview with Stacey Shulman, VP and General Manager in Intel's Internet of Things Group for Health, Life Sciences, and Emerging Technologies.

Watch now

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Around the Enterprise

• UiPath filed to go public. Protocol did a breakdown of all the important details in its S-1 filing.
• Micron spent roughly $3.1 million to largely achieve global pay equity, a spokesperson told Protocol.
• Microsoft is in exclusive talks to acquire Discord for $10 billion.
• Everyone is using AI these days, even venture capital firms. In fact, Gartner estimates that by 2025 at least 75% of investment decisions will be backed by the tech, per the Wall Street Journal.
• During the pandemic, Microsoft shuttered its physical stores. Of the over 2,000 store employees, 260 were shifted to corporate roles, according to leaked audio obtained by Business Insider.
• The publication also reported that Microsoft is having trouble contacting small businesses that were affected by the recent breach.
• AWS recently made Lookout for Metrics generally available. The software helps companies track metrics like page views and transaction volumes, basically a barometer for the health of the business.

A MESSAGE FROM INTEL

"We're moving faster now than we've ever moved, and we'll never move this slow again." ICYMI, catch a glimpse of what the future looks like for developers in this Protocol interview with Stacey Shulman, VP and General Manager in Intel's Internet of Things Group for Health, Life Sciences, and Emerging Technologies.

Watch now