IBM CEO Ginni Rometty’s CES 2016 Keynote (Full Transcript)

So, let me frame what you’re going to then see come to life through their eyes. So, I want to talk about cognitive; what is a cognitive IoT? And then really quickly, what I think are three critical success factors because it’s what so many of you are doing. But first, I want to start with a question.

Now, there’s no doubt that the Internet of Things is all part of the phenomena of digitization of products, of services, of companies. So, if I ask you to raise your hands and ask how many of you either work for a digital company or you are trying to become a digital company, just raise your hand. Okay. Same response about anywhere in the world is almost everyone’s hand goes up. So, it doesn’t matter if you’re B to B, B to C, public/private, it doesn’t matter. And this has got a lot to do, as we reinvent ourselves, what we’ve done to build a good number of capabilities to help you become a digital company.

It started with building the leading and the largest set of big data and analytics capability in the world, building a cloud platform for the enterprise that goes between public, private and hybrid; and then, our work to help you re-imagine how work is done itself and that’s been through the partnership with Apple, and then having built the world’s largest enterprise security company. I think many people don’t realize that even by the end of 2014, those businesses for IBM were over $25 billion; and through the third quarter of this year, they’ve grown 30%.

So, this idea that analytics, cloud, mobility, security, they are all important. But I want to ask you a question. When everybody becomes digital, then what? Who wins? I like to say digital is not a destination; it’s a foundation. I mean, I just looked around this whole conference — wearables, sensors, cars, data everywhere. But what will differentiate you is understanding that data, and that brings me to my first point that Gary also introduced.

I believe the most disruptive, transformative trend is now in front of us, and it’s cognitive. This ability to think, to learn, to understand the systems, the products, the processes, everything you do, and it is the dawn of a new era, the cognitive era. Maybe you could simply say digital business plus digital intelligence. And cognitive is an era of business, and it is an era of technology. So, there’s two drivers for the technology era.

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One, data that was invisible will now be visible to you. Now, you know, we’ve talked about the phenomena of big data forever, but 80% of the data out there, while it may be stored in some systems, it’s black. It’s invisible, it’s not understood. Sight, sound, music — you don’t actually know inside of it what it is, and that’s what’s changing in this new era.

The second thing is the advent of cognitive computing. Now, some people want to shorthand that to artificial intelligence; that’s part of it, but you have to be able to work in natural language and in a domain: understand medicine, metallurgy. And then more than anything, this is an era of systems you do not program; they understand, they reason and they learn. In fact, they therefore have hypotheses and confidence levels — and this is what IBM Watson does.

Now, we worked on this, it started a decade ago, and we went ahead and debuted Watson to Jeopardy!, the game show, in 2011. It has come a long way since then. At that time, what Watson could do was question and answer, which he did beat everyone then. Question and answer, and he had five technologies underneath it.

Fast forward to today. There are now 32 different functions he does, 50 different technologies under it all available via an API so you can pull them into a business and a process. And we’re expanding Watson’s senses, giving it things like sight; and in fact, the first way he’s learning sight is on reading medical images. And then we made a strategic decision to open up Watson as a cloud platform, a whole set of APIs so you would build businesses, companies, processes, products, pulling cognitive into them. So, today Watson is in 36 countries, 80,000 programmers, 500 people building businesses. And it’s healthcare, retail, education, travel. And it is a profound new capability.

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Just think of the ability to build thinking into anything that you do. So I believe it will change not only what you make, it will change how you operate; and in fact, it will actually change who you are.

So, let me then to my second point. That’s cognitive. What about the cognitive IoT? So, imagine, take cognition and infuse it into an IoT. And remember, remember this point. The challenge isn’t capturing and storing all the data I have seen out in all these hallways. 80% of that data is dark. 9 billion connected devices, 2.5 katrillion bytes of data a day. The challenge is understanding it.

So, let me give you a couple examples of clients and what they’ve accomplished so far, from the tiny to the large. So, start with a little startup called CogniToys. They make a dinosaur to talk to your child, and it adapts the personality to work with your child: what jokes, what books, how they learn. It adapts to your child’s personality. That’s a learning system.

On the other end of the spectrum, Airbus makes aircraft. You won’t be surprised that there are 6 million sensors in an airplane and that they’re from 3,000 suppliers. Well, cognitive IoT, we’re about to start processing a half a billion bytes from every flight taken so that we can predict wear and tear over time, predict the time to failure, maintenance far in advance. And then, actually over time improve the way parts are made. They’re also now working on the cognitive cockpit, natural language, a pilot to interface particularly in times of crisis.

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