IBM CEO Ginni Rometty Presents at IBM Watson Group Launch Event (Full Transcript)

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IBM CEO Ginni Rometty and Watson Group SVP Michael Rhodin introduced a new business with Watson clients, partners, and executives on January 9, 2014 in New York. Here is the full transcript of the IBM event….



Ginni Rometty – CEO, IBM

I am so happy to see everyone here. This is a wonderful day, not only for our company but for our clients, for this industry. And what I am here to tell you about is the formation of something called the IBM Watson Group.

Now, for those of you that watch us, we don’t create new units very often. But when we do, it’s because we see something that is a major, major shift that we believe in. It happened in the 1960s. If you study IBM, we had a unit all around something then called the System/360, later known as the mainframe.

Then again in the ‘80s, it was the IBM PC. The ‘90s, we started IBM Global Services. Today is another such moment.

Today is an important moment in our company’s history, and it is also an important moment in the history of technology. And you’ll hear all about this from Mike Rhodin, our Senior Vice President of the Watson Group. He, along with clients, launch partners who are incredibly excited, will all be up here to tell you about Watson. As well, I mean this journey is only beginning; you will hear from Research on everything yet to come.

Eras of Computing

But what I want to do with you is I want to put this in context. To date, to date there have only been two prior eras of computing. The first was called tabulating. It was machines that did just what it says, they counted. This was, as you would guess, the mid 19th century, Herman Hollerith. This was punchcards, this is when IBM did things like the census, Social Security systems. It was the foundation for finance, control, inventory control.

Then, the second era, programmable era. Just what it sounds like, if, then. If, then. You had to program it, tell it what to do. And it is everything that you know to this day. We did it first with the mainframes in the ‘50s and ‘60s. Then it was PCs, tablets, smartphones, anything that’s out there today, it is programmed.

But 2011 — 2011 we introduced a new era to you. And it is a third era, it is cognitive. It is systems that learn. They are not programmed; they learn, and we debuted this on the video you saw, with the something called Watson, and it played Jeopardy.

Now, many remember it defeated the two all-time human champions. But I don’t think everyone understood what was happening behind the icon as it ran. It was a new species, if I can call it that. It is taught, it’s not programmed. By design, it learns by experience, and it learns from interaction. And by design it gets smarter over time and better judgments over time.

But I think what’s most important for right now, for all of us, why we took Watson on, it’s built for a world of big data: 2.5 billion gigabytes per day gets created, and it has — and I underscore the word — “potential” to transform industries and professions everywhere. And to be unleashed, I want you to think about this, though. To unleash all that insights of all this data and I know many of you work on this, you need this new era. In my view, Watson is just in time. A cognitive era is just in time. And this is not just data that the world thinks of as structured; the data you and I can picture in rows and columns.

But 80% of the world is unstructured, tweets, blogs, pictures. And then there’s all this other data about data. Right? So my location, about an object, about a test. And in fact, I think to understand this, what Watson does because you don’t program it, it’s thousands and thousands of algorithms that run, and they improve and they get better and then more algorithms are created.

In fact, I was talking to many of you out there, those of you on Watson now, you have to experience it to see the difference because it is not a super search engine. It can find a needle in a haystack, but it understands the haystack. It is about relations, correlations that you will never see. And this is why we called it a grand challenge when we undertook it.

And you interact with data in a new way. Natural language, and it understands the implications of your questions. And in fact, soon you’re going to hear from Guru, it will ask you clarifying questions back. So, today is about Watson to a new level.

We started with what we call in Research a grand challenge — something that we don’t think the world has yet solved or could solve. It starts as a grand challenge. We then did the work to be sure it could be commercially viable. And it has already begun transforming industries. You are going to hear from many of these partners and you will see and experience it outside. But, as well a growing ecosystem.

So, the world will experience Watson four ways that you will get a taste of today: transformational solutions; enterprise solutions; I said, a huge ecosystem; and then, something called Watson Foundations. So, let me give you just a real fast word on each.

Transformation solutions. Look, this is about transforming industries, professions, like I said. We made the decision to tackle the world’s most difficult problems first. We started with health care, we started with oncology. We have had partnerships with world-renowned experts. They are “the” best in the world. To me, the greatest testament to Watson is they have dedicated their time, their life for years here working with us; they only do that when they see a breakthrough in science, that this will change the face of health care. And I know every one of our partners on this agrees, that we will change the face of health care.

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So, you will see Memorial Sloan-Kettering, the cancer center, two years, oncologists working on how to predict best treatment, evidence, confidence, behind that. Cleveland Clinic, how to use Watson to do teaching, students, to pass the U.S. medical exam. You will see Wellpoint, how is an insurer to approve, but approve based on evidence, evidence, fact-based and to have it done fast. And then, MD Anderson. Those that have ever tried bridging the gap between researchers and clinicians, and that’s what they’re working on.

Then you have the enterprise solutions. So, one was transformative; enterprise. Great projects, great problems, but I consider these more scalable, repeatable. Higher volume, quicker deployment. And we’ve already had in market something called the Watson Engagement Advisor, how to give you relevant answers to lots of questions. Today, you will meet new forms of advisors, and more ahead.

Then, the Watson ecosystem. We want, by design, partners, entrepreneurs, venture capitalists to all build their solutions around Watson. So we are announcing a Watson Developer Cloud. So, think of this, for those of you in technology, the API world ahead of you. And this is going to be APIs, content, talent, in the first clouds up, retail, travel, consumer health care.

Now, we did a really sort of quiet launch of this in November, and overnight 750-plus applicants to build businesses. And that’s with hardly telling anyone here. And then, I said Watson Foundation. What that is, a portfolio of information analytics, capabilities, because that’s what does underpin this cognitive era.

So, everyone here today, I can’t be prouder to announce this group on behalf of the IBM Company. Another billion of investment over the next several years. Over 2,000 researchers, developers, business experts. We’re going to go ahead and put another 100 million in to fund an equity fund for the ecosystem. And very symbolically, this group is going to be headquartered in New York City, in Silicon Alley, 51 Astor Place. Hundreds of people, incubator, design center, solution center, all there.

And Mike and all our partners here today are going to talk to you about what they’re doing. So, you’ll meet on stage, Dr. Craig Thompson, the CEO of Memorial Sloan-Kettering, the cancer center. Dr. Tom Graham, right in front of me, the Chief Information Officer for Cleveland Clinic. Jay Katzen, all around President, Elsevier Clinical Solutions. Kent Deverell, CEO, Fluid Retail. And Terry Jones, who is, as many of you know, the co-founder of Travelocity and Kayak.

Now, I said we don’t form a business unit very often. And when we do, it’s because we believe we can help our company, our clients and our partners establish leadership in a new era. I can’t be more excited. You can tell that. I can’t be more excited about the impact that Watson will make not only on IBM as a company, but our clients, their companies, institutions and society at large. And a moment about society at large.

You know, it’s been 18 months, two years, Memorial Sloan-Kettering, Dr. Kris has been working and training Watson with a whole staff of other physicians. Think about this: infusing Watson with the world’s best knowledge and experience. I want you to think about what that means to share that kind of expertise from this institution and many more. More physicians, more patients, than they could ever physically ever see. Now, you imagine that, that same thought for any profession.

And then, those people get the chance to dialogue with the best collaborator they could ever have, Watson. Unprecedented learning, constantly getting better, and making sense out of all of this world’s data. So, you are going to hear many examples today. They are enormously promising. They are a downpayment on Watson’s potential to transform industry, enterprises, and actually new levels of knowledge, for whether that be citizens or the masses. You just have to talk to anyone here who’s experienced it. The interest, the excitement from clients, it is unending. They view this as the very beginning of a journey.

So, when an earlier Watson, Thomas Watson, Jr., son of our founder, a half a century ago announced the System/360, I will share with you, at that time computer science was an arcane thing. It was not experienced by many people. So, now today, this is a new era. It’s an era of machine-human collaboration, and it is dawning now. You will see the Watson Cognitive Cloud Services, and you will see how they, and you look at it, you will see how it will understand me, it will engage me, it will learn and get better, help me discover. It will build trust, and it has an endless capacity for insight. This is a new era, and I can’t be prouder of the IBMers and the clients that brought us to this day today.

So, it is with my great pleasure that I introduce you to the new leader, the Senior Vice President of the Watson Group, Mike Rhodin.

Mike Rhodin – SVP, Watson Group

Good morning. Good morning. And welcome to a very deep crowd of standing people at the back. This is great. This is an exciting point. I couldn’t be prouder, I couldn’t be happier, and I couldn’t be more honored to be asked to work with 2,000 of our best and brightest colleagues on how we can take this forward. Working with our partners, great companies, great institutions, that see the same vision that we see on where we’re going to take this technology as it evolves.

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The formation of a new group is a big deal. But it’s part of a journey, it all starts with the germ of an idea. Someone had the grand challenge idea of, could we really answer the world’s hardest questions? Right? IBM Research did an incredible piece of work, culminating in a pretty daring display on live television. So, you start to look at television and you start to realize if it had gone the other way, right, it might not be so much fun.

But an incredible piece of work: 27 core researchers dedicated four years built on the shoulders of decades of research and technology. What we did next, we took that team and we built a team to start looking at, how would you commercialize it? We built a team under Manoj Saxena that, as many of you have met, embodied the essence of what it means to be an innovator, to be a startup. We intentionally hid them, right? A tiny group, protected. Based them out of Austin, let them play, let them experiment, let them learn. Learn in the market, working with many of you, our clients.

Now, any startup goes through many phases, right? They had to learn how to fix bugs and make it better and improve it every day. And over the last two years, working in the market, cocreating, collaborating with clients, with partners, we believe we’ve created something that is ready to go. Ready to go mainstream, and mainstream is where we’re headed.

With the creation of the new group, we’re going to take this from those 27 researchers, to the few hundred people that have been working in startup mode for the last two to three years, and we’re going to move on to the next phase: 2,000 people. That’s a lot, right? You’re going to see today examples of technology that are going to come out. New products, new capabilities that are going to really improve what we mean by cognitive systems, what Watson really is.

I think you’ll see that what you knew Watson as was merely the tip of the iceberg. The depths of our IBM researchers that have been working in parallel to the commercialization team have built a whole new wave of technology that now today is moving over to the new group. That technology is going to be rapidly commercialized and put in market and you’ll hear about some of those advances as we go through the morning.

We’re going to take some technology from our world leading software business, stuff that will help us move this along much faster and join the group. Right, so today we’ve gone from a few hundred to several hundred and over the course of the year that will continue to expand up to 2,000. Rapid growth environment.

Now, many of us have, you know, heard about Watson, we’ve read about Watson, we see articles about Watson, we see people speak about Watson. There’s YouTube on Watson, right?

So, what is Watson?

Right. If you take it at its essence, at its core, it’s a system that understand natural language. You don’t have to write programs, you don’t have to learn things like Fortran or Java. You just ask it questions. It reads. Think about it as reading, right? When it reads a lot, it adapts and it learns. It gets smarter.

When it gets smarter, you can start to ask it questions. When you ask it questions, it will generate and evaluate hypothesis, potential answers with a level of confidence. When you think about that, that’s how we work: we read, we learn. We start to answer questions. That’s how we know whether we’ve learned that or not.

Watson learns like our children do. How do you know when your children are learning a new subject? How do you know they’ve actually learned it? You ask them a question. You see whether it gets the right answer. And when it doesn’t get the right answer, you help them discover the right answer, and it learns. It gets smarter.

And the next time, it gets that right answer and it builds upon things. But it just doesn’t learn from what it knows today. You can add more data to it. It reads new books, every day. And as it reads new books, it learns. It connects the dots with what it just read with what it already knew. Sometimes the new reading contradicts what it already knew. It has to sort that out. The same way we do. Right? It has to understand new information in the context of its relevance — the connection — to the old information that it had, and how important is this new piece of information.

So Watson has come a long way. But this is really, think of this really as just an engine in a cognitive system. It’s not the end state; it’s the beginning state. So as we start to move forward, Watson is getting smarter, we’re adding new capabilities to it. It’s learning to reason, to think through things. To help people using it move along a journey to come up with the right answer, the right diagnosis. It’s using that first engine I talked about as a subroutine, as something that it calls. That it asks questions to. That is new technology from IBM Research called IBM Paths, WatsonPaths.

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Watson is learning to explore, visual exploration technology, to help you wander through massive amounts of big data to find that relevance, find that hidden jewel in a haystack. It’s learning how to visualize answers, not just speak back to you. Draw pictures for you. The art of human communication is not just text. Right? It’s pictures, it’s text, it’s images. All of those things have to join in to the system we call Watson.

So, today we’re going to talk about this next wave of technologies that are adding to the cognitive system family. We’re going to go through some examples with some world-leading experts. We’re going to talk about some of the new products that we’re going to announce today.

And then, we’re going to peek off into the future as to where this may go next, because I think there needs to be more circles on that chart, and Guru is going to talk about those a little bit later. So, Ginni mentioned the new headquarters. Whenever you have a growing family, sometimes you have to get a bigger house. Right? And when you’re getting a bigger house sometimes you want to focus on location, because location matters. Right? When you walk through the areas of Silicon Valley, or Silicon Alley and you look at the real estate, you look at the buildings, the history of that area, the edge of the East Village, historic Manhattan property.

In the center of it, there’s this brand-new iconic beautiful building. On a block all its own, standing out from everything else in the area. This is our new home. This will be the headquarters for IBM Watson. It will be a place where our people, our best and brightest, work with our partners, with our clients to imagine the future, to help create the future. It’s going to have an incubator that helps businesses get started with Watson. We’re going to have some of our best and brightest designers, graphical experts, help those products become really what they should be. And it’s right in the middle of the trendiest, hippest area of town. Not exactly where you would have thought IBM would open a new headquarters. So, we’re pretty excited.

We’ll be in our environment a little bit later this year. The building is done, as you can see. That’s the live picture of it. But the inside of the building looks pretty much like this. So we have a little bit of work to do. Even though, I think this is pretty cool, right? So I don’t think we’re going to do too much work as we go forward. So, we’re putting the right people, as Ginni said, we’re investing a billion dollars in this over the next few years. We’re creating a incredible environment to put this together. And we’re going to share Watson with the world. Right? Eras are not ours alone; we just happen to have a history of shepherding them and bringing them to life for the rest of the world.

We make markets, we create entire industries, and that’s what we’re going to do with this. So, what we’ve learned as we’ve worked with Watson, as we’ve worked with many of you. As Ginni said, there’s three kind of classes of things that we see happening, and there’s some homework that you have to do to get ready. And that’s what we’re going to talk about now.

First, we truly believe based on the work we’re doing, that this is going to transform entire industries. It’s going to make people rethink how business gets done, how their organization works, how we treat patients, how we sell things to clients. It may in fact start to rehumanize the Internet. As we’ve worked on those kinds of solutions, we’ve recognized that there’s a set of repeating patterns that we’re seeing over and over again. And in our industry, when we see repeating patterns, it’s a clear indicator that you can productize something, so we’ve started to do that.

We’ve launched products for the enterprise that can deliver value faster, repeatability is important. And normally you would view transformational solutions and enterprise solutions as right in IBM’s alley. We recognize that the power of this technology is really about what it can do for everyone. And to get to everyone, we need help. We need an ecosystem, we need partners. Right? And we’re opening Watson up to the world and we’re asking for that help, because we think everybody that decides to help, that decides to join us, is going to change the world and we’re going to make it better. That’s what the ecosystem is all about.


So let’s start talking about transformation. Now, when the Jeopardy match occurred and we were all holding our breath as it came down to Final Jeopardy, we weren’t the only ones watching. It turned out that many of our clients were watching. And when the match was over and finally aired on TV, our phones started ringing. And it wasn’t who we would have normally expected: doctors, health care was the first to call. They saw something that could be the light at the end of the tunnel. They’re faced with an enormous sea of information. Not just the medical reference material you have to learn in order to become a doctor; it’s the enormous amounts of information that are published every single day, from the researchers around the world.