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

Title: IBM CEO Ginni Rometty’s CES 2016 Conference Keynote – Transcript

Event: CES 2016 Conference, 4:30 PM Wednesday, January 6, 2016 in The Venetian’s Palazzo Ballroom.

Speaker (s):

Gary Shapiro – President and CEO, Consumer Technology Association

Ginni Rometty – IBM Chairman, President and CEO [Full bio]

Kevin Plank – CEO and Founder, Under Armour

Omar Ishrak – Chairman and CEO, Medtronic

Kenichi Yoshida – VP Business Development, SoftBank Robotics Corp

 

MP3 Audio:

 

YouTube Video:

Lady Announcer: Ladies and gentlemen, please welcome the President and CEO of the Consumer Technology Association, Gary Shapiro.

Gary Shapiro – President and CEO, Consumer Technology Association

Welcome to CES 2016. I am so excited to be on this stage this afternoon to introduce our keynote speaker. You know, for nearly half a century, CES has been mostly about cutting-edge consumer products and during most of its more than 100-year history, IBM has been the preeminent leader in the business to business IT. But that’s changing for both of us, and I am thrilled that we have IBM’s CEO Ginni Rometty here with us today to talk about this new paradigm.

In fact, the massive convergence going on around the world, thanks to Big Data and the Internet of Things, is driving two distinct trends. First, CES is no longer totally consumer product centric. It’s increasingly about technologies driven by the Internet of Things; and IBM is today leveraging its advantages with data and the Internet of Things to enter spaces it has never even been in before, appealing to totally new audiences as a result.

As Ginni has said many times, data is humankind’s next natural resource, and she’s leading a major transformation at big blue to become “the” preeminent company in what it calls the new cognitive era, driven by systems that actually learn. During her tenure — which began almost four years ago to this very day — she has made the cognitive power of one of IBM’s most iconic technologies the centerpiece of that transformation: Watson. The same system, which beat the two top human contestants on Jeopardy! in 2011 has been featured in ads with such top icons as Bob Dylan, in fact, it’s now at the center of what may be big blue’s biggest bet ever.

In fact, the same company’s technology helped land man on the moon just a generation ago has its own new moon shot today with Watson: transforming healthcare and education as we know it. And they’re not stopping there. In fact, last May, Ginni made headlines with a really bold prediction. She told an audience of IBM customers in New York that included engineers, doctors, bankers and other professionals that, “in the future, every decision that mankind makes is going to be informed by a cognitive system like Watson, and our lives will be better for it”.

Well, with the coming cognitive era, I am thrilled to announce an important research partnership between the Consumer Technology Association Foundation and IBM. The research will focus on identifying how cognitive computing will transform our lives as we age and also transform the lives of those living with disabilities. IBM’s generous contribution of funding and resources will lead to important research into the impact of technologies like Watson.

It’s still the early days, and major transformations are extremely difficult to pull off. But as Ginni is fond of saying, there’s a reason why IBM is 105 years old. It’s because the company has a long history of making big bets in the future and of being proven right. We will hear from Ginni about IBM’s bold and optimistic vision for the coming new era powered by Watson and cognitive business. We’ll also see a few demonstrations of how it’s being used today and hear from some IBM customers discussing cognitive, IoT and other key topics.

Ladies and gentlemen, please join me in welcoming our keynote speaker, IBM’s CEO, Chairman, Ginni Rometty.

Ginni Rometty – IBM Chairman, President and CEO

Thank you, Gary. You did a great job. Well, thank you. That was a very generous introduction, and I thought Gary was going to give my presentation. I thought he was doing a great job, actually. He did a great job except for one thing. Did I hear him properly say that I was with IBM 40 years? Did I hear that? That — look at me. Does that sound true? I hope not. Not true. If you’re thinking yes, no.

And so, look, it is great to see so many people here and so many IBM clients. And I don’t think Gary mentioned this: I am the first IBM CEO to ever speak at a keynote here at CES. And so, you might be asking — Well, if you clap at that, you will clap at anything. Okay?

So, I am the first, and you might be asking why and why now. Now, I have walked around, looked around, clearly, IoT is a major theme here. It impacts every industry, every company. And I am here, IBM is here, because I want to assert something to you that the future of the Internet of Things is cognitive, the cognitive IoT. And I am going to be joined by CEOs from three major companies, all different industries, and we’re going to make some major announcements here today that embody this exact future I’m going to talk about.

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.

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.

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.

Then I jump to a different consumer application with a partner called Finnair. I’m originally from Detroit. Detroit Pistons, Auburn Hills, the big, the Palace where they play, that’s basketball, 100 beacons, Watson is real time analyzing the sentiment of the fans, matching that with what’s happening on the floor in the game, real time offers actually related to what just happened to any player going to every individual, custom. Another way, you could imagine you would engage and do this with any kind of place where consumers aggregate together.

Or, Whirlpool. In fact, if you went to the briefing center here, you’d see it. Real-time — real-time devices, obviously, what Whirlpool makes, data connected, the connected appliance, plus Watson IoT cloud and you have a cognitive oven stove, whatever it is. So, if you go down there, you’ll see a Jenn-Air connected to Chef Watson, and you’ll see how they work together, learning the preferences, the needs of a family and making recommendations. That’s the world I see in front of us.

Now, what do you need to do that? I will end with three critical success factors. You need the right platform. You’re going to need new forms of data — not just more — and analytics and an ecosystem. When I say “the right platform,” Internet of Things, you all know this. It’s about real-time data. But what most people can’t do is as a result of the insights take immediate action. You need a platform to do that. We’ve built out a cloud platform in 41 countries, a platform called Bluemix for those of you that build the applications. The largest cloud foundry deployment in the world, 120 services. Then the services and software for a hybrid world to connect to your existing businesses, and then Watson APIs that allow you to put cognition in everything you do.

Second thing, you’re going to need new forms of data, new forms. I just said there’s so much. But what I mean by new is we’re committed to help you, and part of that is by building out a huge capability on data and analytics. We are approaching $30 billion of investment in having built analytics capabilities, including 30 acquisitions, 15,000 experts, hundreds of mathematicians. But we also need to bring you data that you don’t possess but you need.

How do you make sense out of some pretty big amounts of social data? It needs to be curated, Twitter, Facebook. Or, the weather. Everybody in here working on Internet of Things, the weather is the most pervasive impacting source of data there is. And you may or may not be aware, it’s why the IBM Company acquired The Weather Company. Now, those of you, everybody’s got a weather app, and probably theirs is on your phone. When you hit it, you might just think it’s going to one of the government weather agencies. Well, not true. It’s a very sophisticated real-time platform. 3 billion weather reference points a day are collected, sophisticated in analytics, and anywhere from 26 billion to 30 billion transactions a day go against that. Now, we’re going to combine weather with all your operational data.

And then next up, since that platform can go way beyond weather, telematics, sensors, and you can start to see what you could do for insurance risk, for retail demand, for auto safety. In many ways, The Weather Company, it’s an IoT company, and weather just happened to be one of the first use cases it had.

There’s a second then kind of data that I think you’re going to need, and some of you have started, but not everyone. It’s the huge flood of video that will matter in this world of Internet of Things and cognitive. Now, streaming is growing exponentially. If you look at all the data out in the world a different way, 80% of it is going to end up being video. If you’re in entertainment, media, you understand that. But it will now transform every industry, it won’t matter. Right?

How many of us, you don’t have to turn on the news to think about a police car with a cam or a policeman with a lapel camera. Those of you in retail, I think you know that, if someone sees a video, they’re two times more likely to buy. So, we’ve added video services to all of our Internet of Things cloud, over the top video services. You’re probably surprised, but we do that already today for Wimbledon, for the Masters, for NFL, for HBO, for Sony Movie Channel, for Time Warner, for Verizon. Anyone then can serve up the right video at the right moment, and we are just starting on being able to prepare for you a lot of this dark data that you need but you don’t have to own.

So, two critical success factors: the first, the platform; the second, new forms of data and analytics. And then the third is an ecosystem. And that brings me to the most exciting part of, I hope, this afternoon together.

Now, we’re very committed to build these out by industry and by domain, and we’re well underway. Watson Health, we announced back in April with many partners: Johnson & Johnson, Medtronic, CVS, Epic, Boston Children’s Hospital, Memorial Sloan-Kettering, the cancer center, Apple Research Kit. We’ve done a number of acquisitions. But last month we also announced our Watson IoT business.

Now, we’ve been working in IoT for quite a long time already, 4,000 clients, seven of the 10 largest auto companies, eight of 10 largest oil and gas, and 11 of 12 aerospace and defense. But now this is about bringing cognition into IoT. Back to where I started, I really believe this will insert any IoT that’s going to differentiate you in the future will have to be cognitive. And we opened up this unit, we headquartered it in Germany, headquartered in Munich, a thousand people are there but there are eight centers around the world. We have the Watson IoT set of analytics, Watson IoT cloud platform, and then a whole, whole ecosystem of partners. And that’s what I want to now show you, is the partners we’ve brought today; and in fact, the announcements we’ll be making, because the Watson Internet of Things is not a future, it is here today. And I have got three great announcements here and the leaders of their companies to join me to show you some of this.

So, let me now, with great pleasure, give you a little introduction to my first guest. Many of you know him. Kevin Plank. He is the founder, CEO of Under Armour. He is certainly one of this nation’s, if not the world’s, most successful entrepreneurs. As you know, Under Armour already at $4 billion, 14,000 employees. And Kevin, he will tell you, he’ll tell you himself, his mission is simple: to make all athletes better, through passion, design; and of course, relentless pursuit of innovation. I have gotten to know Kevin. You will find he is just getting started. And we are announcing here today our partnership, and you’re going to see the beginning of the app that’s rolling out now to transform personal health and fitness. Kevin coined the word “connected fitness.” UA Record is their dashboard. It will be powered by Watson. Think of this as the Internet of athletes.

So let me ask you to welcome Kevin Plank to the stage with me. Kevin?

Kevin Plank – CEO and Founder, Under Armour

Thank you so much.

Ginni Rometty – IBM Chairman, President and CEO

The world’s most successful entrepreneur.

Kevin Plank – CEO and Founder, Under Armour

That’s a big claim, but thank you very much for having us today, Ginni.

Ginni Rometty – IBM Chairman, President and CEO

My pleasure. Look, so Kevin and I are going to do a little Q&A, and then he’s going to do a bit of a demo here.

Kevin Plank – CEO and Founder, Under Armour

Yes.

Ginni Rometty – IBM Chairman, President and CEO

So, for those of you that don’t know, Under Armour formed in 1988. It is an amazing story. Right? So, let me have you just tell the group here a little bit about the Under Armour of today.

Kevin Plank – CEO and Founder, Under Armour

Well, thank you, first of all, for allowing myself here to be able to tell the Under Armour story with the positioning of IBM Watson — what that is going to be able to do a) for our company and also being able to give back, help enrich lives for our consumers. So, at Under Armour, we’re entering our 20th year in business. As we started, and we began in 1996. I was a football player in college that didn’t like the way my cotton T-shirt felt beneath my equipment and wondered why no one ever made a better alternative to a short sleeved cotton T-shirt in the summer or a long sleeved cotton T-shirt in the winter. And that’s gone from taking us from a company that’s changed the way that athletes dress including some that I’ve seen here in the convention. They say, hey, are you the Under Armour guy? And I get grown men pulling their underwear out of their pants at me.

Ginni Rometty – IBM Chairman, President and CEO

I don’t get that when I meet…

Kevin Plank – CEO and Founder, Under Armour

Not yet, no. We didn’t rehearse that one, Ginni. It’s truly changing the way that athletes live. You know, we’re coming here today with an ecosystem that has today counting more than 160 million people amongst our connected four apps that we have. And the question that we want to answer and why IBM Watson can be such a difference for our brand is that why is it that we know more about our own cars than we do about our own bodies? Think about it. We get into our cars. We know how much gas, we know how much oil, we know how much tire pressure. We can run diagnostics from Detroit. But when you ask us about our own health or I say, how many days were you sick last year, most of us just say, I don’t know, not so many. If you asked me, I’d say, I don’t know, I get sick every time it goes from summer into fall, every time it goes from winter back into the spring, I catch a cold. But imagine if we actually had data — data that could help us make that decision and make it better.

So, when you think about that, imagine what that could mean for you as you look at life, and that’s where we basically began to create this ecosystem that we call connected fitness that began just about two years ago.

ALSO READ:   Transcript: Ann Makosinski on Why I Don’t Use A Smart Phone at TEDxTeen

Ginni Rometty – IBM Chairman, President and CEO

So, connected fitness, and I would recommend to anyone in the audience a Wired magazine article came out about two days ago, I don’t know if — I hope you read it, it’s a great article about Under Armour. And really Kevin kind of coined, I think, this phrase “connected fitness.” And in fact, you’re the original wearables in many ways, traditional and now new.

Kevin Plank – CEO and Founder, Under Armour

True.

Ginni Rometty – IBM Chairman, President and CEO

So, talk a little bit about connected fitness.

Kevin Plank – CEO and Founder, Under Armour

So, more than two years ago, we looked at our company and today, 14,000; a little more than 8,000 just a couple years ago. And you look at the size and scale we had, and we looked and said we didn’t have enough really smart people. We didn’t have enough engineers working in our business, attracting them to sporting goods. And so, the goal we had is that while we recognized the future was going to be in what we called wearables and digital, and what was our play on digital and we decided that getting into hardware wasn’t exactly what we wanted to do, and our bet was going to be on community. We made our first acquisition with a company called Map My Fitness or Map My Run, Map My Ride.

Ginni Rometty – IBM Chairman, President and CEO

How many people use those things? Anybody? Look at that, tons of hands already.

Kevin Plank – CEO and Founder, Under Armour

So, you’ll see hands going up. There were 20 million registered users when we bought the company December of 2013, and in just 12 months, it grew over 50% to 32 million users. And so, when you look at what that meant and the size and scale, we then decided that we weren’t asking the right answer, is that we didn’t have the right question to ask. And so, we decided that in betting on community, agnostic was very important and open platform was very important to us. So, we decided to double down on what we had with Map My Fitness. We bought two more companies: one called EndoMondo, which is a GPS tracking application just like Map My Run or Map My Ride; and the third was a company called My Fitness Pal based out of San Francisco, led by a guy named Mike Lee and his brother Albert. And this was the nutrition site, it was really the third leg of the stool. And we thought that if we could contain this amount of data and put it in the one place and be able to truly empower the consumer with information that would give them, allow them to enrich and able their lives, it would be powerful. Scale is incredibly important here. In just the last two days alone, we’ve had more than 350,000 people download one of our four apps that we have today. So, incredibly proud, proud story of what we have and where we’re heading now.

Ginni Rometty – IBM Chairman, President and CEO

So, now they also made — and Kevin made an announcement yesterday — something called the Health Box. So, add on now. So, start with the concept of community and now the Health Box.

Kevin Plank – CEO and Founder, Under Armour

Well, we were definitely playing chess and not checkers when we got into this game. And so, what that meant is that our play was on the King of how can we truly enrich lives in our community? So, now, again, counting more than 160 million people, Health Box is meant to be a system because wearables to date have never really given you true information about yourself. Sure, they’ll tell you how many steps you took or it will tell you how long you slept. But allowing me or empowering me to make proactive decisions about my life or my health and fitness is something that we believed needed a system. And the system comes in three parts. The first part is the wearable device that you have, and Ginni has one as well. It will track how much you sleep, it will track your steps. It will also do a number of other things in checking resting heart rate and several other pieces. It has accelerometry in it.

The second device is the heart rate strap. It decides when you’re going to exercise, it will tell you how hard you exercised, how many calories that you burned. And the third is the scale. And the idea of this is being able to track your weight on a daily basis. And if we can give you this frictionless devices, including the band which has a seven day battery life and charges in less than an hour, it’s something we believe can create a true picture for the consumer. It’s something that we have called the record platform that we hope to eventually merge our consumers into and say, if I know how much I slept, if I know how many steps I took, if I know what I weigh, if I know how much I ate and what I put in my body, imagine what we can do to articulate a true definition for the consumer that can make them actually feel better.

Ginni Rometty – IBM Chairman, President and CEO

So, this takes us to the first, it’s actually going to be a very I think exciting run together here, but the first announcement, which is, obviously, UA Record powered by Watson. And so, you’ll see the very first thing, so why don’t you talk a little bit about, and you’re actually going to show some of the very first insights Watson offers here.

Kevin Plank – CEO and Founder, Under Armour

So, the exciting thing about this is what it can really do. Again, there’s three components that go into what makes — or, four components that really, the four quadrants, as we call it, on the app: sleep, activity, fitness and nutrition. There’s two other components that we added to that, as I said earlier, weight; and the last component is this thing called how do you feel? So, imagine if you could capture all this data in just one place and have one daily dashboard for health because you think about it and go, I know more about, again, my car. I know more about my portfolio or my stock or my bank balance than I do about my own health and fitness. And it’s a subjective answer.

So, if we can only take something from, a) taking those four quadrants, adding weight, and then this last feature that we call “how do you feel,” being able to rate yourself on a one to 10 scale on a daily basis that just says, how do you feel? If I feel great, I feel like a 10; if I don’t feel so good, I feel like a one. And be able to take that insight and take that information and say, imagine if I could look then and I can truly take myself and allow myself to be able to make proactive decisions about the days that I rated myself a nine or a 10. Because you look and you think, what does that mean? Because there’s three ways that we hope that people will be able to compare themselves. You can compete if you’d like, but hopefully you’re going to compare yourself against number one, comparing against myself. If I have this data of the wheel, as we call it, and be able to look at it on a monthly basis and say last month that my data, my information, it basically looked like this, and there were three days where I rated myself a nine or a 10, what’s the activity that I did leading up that allowed me to rate myself at nine or 10? Well, I slept at least seven hours. Well, I definitely exercised in the morning. I ate no more in the My Fitness Pal protocol of either registering whether you had a heavy day of eating, an average day of eating, or a light day of eating. So, I had no more than an average day of eating.

And then third, the third quality that we have is the ability to take this information and to truly be able to do something with it. The second component is the competitive nature of competing with your friends. So, I know how I competed against myself last — yesterday, last week, last month. But how do I compare against my friends, others like me, whether it’s my friends from high school, my friends from work, my family. And the third component is this feature where we brought in IBM Watson. And this is the feature that tells us about what it means to find people that are just like me. So, just like me imagines that in my data set, of the 160 million people that we have on our platform today, I have an ecosystem of roughly between 40 to 45 year old males, there’s 4.6 million males just like me. And of those 4.6 million males, the average weight of them is 192.4 pounds. The average run for those that decide to go and exercise that use jogging or running for their exercise, they run at least 4.1 miles. Their average sleep is 6 hours and 38 minutes. Their average calories consumed on a daily basis is 2,174 calories. And imagine if I know that if I eat less than 2,000 calories and I have a weight goal of losing 10 pounds in some period of time, I can start dialing in the things that I need to do, the decisions that I need to make in order to make proactive decisions to improve and ultimately to enrich my life.

In the future, we dream and we think about insights, the way that Watson will be able to empower us. And there’s things like whether it’s an example from the American Cancer Society study that says that spending an excessive amount of time sitting at least six hours or more during the day decreases a person’s life expectancy regardless of whether they exercise regularly or not. This is an insight that Watson will give you, kind of — it’s pretty scary at some level but it’s also empowering. It allows you to make decisions to improve your life. In the future, it will deliver a personalized call to action based on your activity. For instance, if my ideal sleep time is seven hours and I only slept five and I was planning on going for a run because I always go for runs on Thursdays, it may recommend that I maybe just take a class, do the elliptical, perhaps do a yoga class or something a little less stressful or a little less tense. That’s the type of information that we believe we have, I think, to bring to bear. So, when Watson is taking the programming of 160 million people just like me and be able to deliver that back in a proactive way for me and for Under Armour, and frankly for all consumers all over the globe. And again, simplicity is at the key of whether it’s Health Box or whether it’s the data and the information you get, or whether it’s the simplicity of just looking at that basic wheel every day.

Ginni Rometty – IBM Chairman, President and CEO

So, the first capabilities you’ll see with Watson are Just Like Me, and then goes on from there to the Cognitive Coaching. You want to talk one minute about Cognitive Coaching, and we’ll wrap up on that.

Kevin Plank – CEO and Founder, Under Armour

So, we believe the future that we have in the world is like how will coaching truly be able to help me? And that is where you’re using things and saying like, to be my coach, again, within my data set of the 4.6 million males just like me, how can I really lean on Watson being able to triangulate in a workout plan or a program for me? You know, things that it will be able to give me the data on a daily basis. Again, in a very subtle way, it’s not marketing to you, it’s not advertising to you. It’s just simply giving you information where it doesn’t have to be a personal trainer that costs $80 an hour. It could actually be a Watson system that will personalize something just for me, finding others that are just like me who want to get better.

Ginni Rometty – IBM Chairman, President and CEO

So, I think, Kevin, together, I think we both believe we will change lives. And at the same time, I think one of Kevin’s famous sayings he always says to his own team is, but at the same time, we’re going to still sell shirts and T-shirts and sneakers.

Kevin Plank – CEO and Founder, Under Armour

Yes.

Ginni Rometty – IBM Chairman, President and CEO

Right? So, at the same time.

Kevin Plank – CEO and Founder, Under Armour

It’s a very simple process. It’s like, we’re going to do a lot of cool stuff, but at the end of the day, the one thing we know, the more people exercise and work out, the more shirts and shoes they’re going to buy. So there’s a very — there’s a logic to all of this, believe me. So, we encourage you all to know how much you’re working out, know how much you’re sleeping, know how much you’re exercising. And then again, don’t forget to buy shirts and shoes.

Ginni Rometty – IBM Chairman, President and CEO

You got it.

Kevin Plank – CEO and Founder, Under Armour

Thank you so much, Ginni. Wonderful.

Ginni Rometty – IBM Chairman, President and CEO

So, you can see why we’re so excited. And again, you’re able to use Watson already in the app first round, and he is just like any learning system, going to continue to get better. So, kind of keeping in that same theme, my next guest and my next partner to introduce to you is Omar Ishrak, who is the Chair and CEO of Medtronic. A global healthcare company around the world, many of you I I’m sure know them, because they’re a leading global healthcare medical technology company. So, almost $30 billion in revenue, 85,000 employees, 160 countries. And actually, a company like Medtronic, if you’ve got any illness in your family, you might know of them. They’ve been in Internet of Things truly before the word was ever there.

Now, those of you that know Omar know he is very committed to access to healthcare, quality of healthcare and outcomes. And what we announced with Medtronic, we announced a partnership that started just in April. But Omar and I are here together today to tell you we’ve reached a very important milestone: our first partnership together is in diabetes management. And so, with Watson, the breakthrough we’ve had is the ability to predict a hypoglycemic incident event up to three hours in advance. Now, those of you that if you’re not familiar with the disease, there is no prediction of it, none. So, up to three hours in advance is what prevents dangerous health events from happening because you can do something about it. So, we can’t be happier about this. You’re going to see that this app rolls out this summer. And I want to welcome Omar, and we’re going to talk all about the future of your health here. So, Omar?

Omar Ishrak – Chairman and CEO, Medtronic

Ginni, thanks.

Ginni Rometty – IBM Chairman, President and CEO

Good to see you. Now, like I said, improving lives is what this business is all about. And I got the chance, I was telling Omar over the holiday, I have a friend who’s got one of Medtronic’s devices. And I said, I listened to an hour of her telling me what a great company Medtronic is and their service and their attention in what they do. It speaks to the value. So, for those of you that don’t know this company, I want Omar to tell you just a little bit about Medtronic before we get into diabetes.

Omar Ishrak – Chairman and CEO, Medtronic

Well, thank you. Thank you very much, Ginni, for allowing me to be here to share the stage with you and for starting us off with that very nice story. Now, Medtronic, as Ginni mentioned, is a medical technology company, but our main company can be encapsulated by our mission. And our mission is that we are a biomedical engineering company who are focused on alleviating pain, restoring health or extending life — which in other words means that we’re a technology company determined to change outcomes in healthcare. We cover many disease states. Cardiac and vascular is a big one for us, neurological diseases, respiratory conditions, diabetes as Ginni just mentioned, and also we’re present in different ways through which we can help the outcome of patients who have conditions and are in the ICU — in the Intensive Care Unit — or in operating rooms. So, that’s like Medtronic in a nutshell for you.

Ginni Rometty – IBM Chairman, President and CEO

So, this spring, as I mentioned, we started our partnership together. And unless you’re very familiar with diabetes, I think some of the statistics are interesting about what a challenge it presents to the world and to our society.

Omar Ishrak – Chairman and CEO, Medtronic

Indeed. Diabetes, first, it’s a big disease. Over 400 million people in the world have diabetes, and that is something like one in 11 people around the world. Second, it’s costly. I mean, it costs a lot of money for the healthcare systems around the world because patients have to be treated and then monitored continuously to keep them alive. And some of them have catastrophic conditions which require emergency room visits that are even more expensive. So, it costs something like $600 billion a year globally. That’s the spend from healthcare systems around the world. So, it’s a very big disease that affects a lot of people, costs a lot of money.

 

But at the same time, it’s a disease where self-management can both be a blessing — in other words, by self managing you can stay well and lead more or less a normal life — or it can be really damaging in that you go to the emergency room every three months and have risk of death. And worse still, even if you get through that, you may have long-term complications like amputation or blindness or cardiac disease. So, it’s an area which if we can make a difference in, we’ll have a big impact in healthcare.

Ginni Rometty – IBM Chairman, President and CEO

So, maybe share with everyone, because again, it’s the number six most deadly disease here in America. So, talk about what happens today and how cognitive and Watson can help, because maybe describe what happens today. I think everyone imagines that, no, this is already monitored, and you can tell. It’s not true.

Omar Ishrak – Chairman and CEO, Medtronic

No, it’s not true because most of the diabetes patients, in fact, have medication or deliver insulin by themselves. In some instances, they have pumps. And they’re categorized into different stages of intensiveness, the disease. But in almost all of these cases, the amount of time they interface with the healthcare system actually is very limited. It happens about maybe once every three or four months, maybe a little shorter than that. And usually the visit with the doctor is a 10-minute visit, are you okay, and look at some very coarse, average data. And from that, you’re done. But like I just described, diabetes is a disease that requires continuous management. It changes by the minute depending on the stress level of the person, what the person’s eating, what activity the person’s had, what kind of medication the person’s given himself or not. All of that, in any instance, determines a certain condition. And looking at that person for 10 minutes every three months and looking at average data — while I don’t want to trivialize that because that is the way in which we do things today — is nowhere near where it can be and where it should be. And the Internet of Things, by being able to capture data and help manage that patient’s life, can make a dramatic difference.

Ginni Rometty – IBM Chairman, President and CEO

So, I’m going to ask Omar to now actually show you a demo. This is going to be out this summer. And again, back to the big differentiation. It’s one thing to capture all this data; it is another thing to do predictions with it and learning — learning about the individual, the cohort. And you will see, as I said, the ability to predict an onset, a hypoglycemic event, three hours in advance.

Omar Ishrak – Chairman and CEO, Medtronic

Yes. So, it’s my pleasure actually to describe this app for you, which is essentially a Medtronic app. But as I’ll describe in a few minutes, Watson really takes it to a different league of performance. So, this is a screen, a screenshot potentially of a person with diabetes. Now, I’ll talk about a fictional person, let’s name him William. And in the screen it shows that William has burnt something like 1,500 calories for that day. And a lot of this can happen because it’s just a metabolic rate. It can probably burn 1,000 calories or something by midday for different people, and then he might have done some exercise, and he’s gone up to 1,500. It could be something else for others. It also shows that William’s glucose level at that instance actually is 140, and I’ll come back to that in a minute. But at that instance, that’s what it is. And it also shows that the amount of food that he’s eaten has resulted in carbohydrate intake of 14 grams. So, this is probably being entered manually. So, that’s like a dashboard, if you like, an instantaneous dashboard of William’s physical condition at a point in time.

ALSO READ:   New Imaging Lights the Way for Brain Surgeons: Adam de la Zerda at TEDxStanford (Transcript)

Now, let’s talk about the glucose number because that’s most interesting and least understood in many ways. Now, the glucose number for 140, this is really the instantaneous number, but as you can see, there’s a graph there, which shows a trend, which means that we have integrated into this app data from a continuous glucose monitor that we make. Typically, and many of you may know this, the way in which you measure glucose is that you do a finger prick test. You get a little blood from your finger, put it in a meter and you get a reading at one point in time. And at most, people will do this maybe at most three or four times a day, sometimes once a day, sometimes even less than that. This is a continuous monitor, so it shows the glucose status of that person at every point in time. And so from that, you can get real trends, not just different kind of sample points over a day or so. And so that’s very important data, and it’s used together with the others to make a bigger difference.

Now, let’s say William is sitting with his wife Anna in a restaurant, and they are preparing to have a meal. So William looks at his dashboard and says, well, if I’m going to eat something, what’s that going to do to me? So, he decides, I’m going to order a certain type of food, and the app now comes out with a prediction saying that, look, if you eat this — and in this case, it’s pasta, a pasta salad, it knows what the carbohydrate content is, what the fat content is. And from that, it predicts, look, if you do this, it’s going to do this to your total carbohydrate budget if you like for that day, and it gives that useful information for William.

Now, it could be that this is enough, that William knows this, is sort of familiar with his condition, and he’s fine. He eats it, and he goes along. But you know what I just described to you, all that’s in the dashboard and it’s in the app is something that requires William to really kind of think about stuff, think about, I just — I’m having a meal. I’ve got so many calories. I’ve already had so much carbohydrate. My sugar level is 140. I’m probably going to be okay. He may be right; he may be wrong — because he’s just using his mind now very intuitively based on his own personal experience, as to what something will do. Now, that is not going to be even close to what something like Watson can do.

So, Watson comes in now, and we insert Watson into the equation, and then Watson does a check, if you like, as to, is this okay or not? In this particular example, in the app that we’re launching, we’ve got Watson coming in and saying that, again, in this fictional example, look, while you may think it’s okay, it really isn’t. And an advisory alert actually goes out in this situation and says that, watch out, there’s something wrong here. At this point in time, you’d better look. So, there’s an advisory note. So, William clicks on that. An advisory note comes out and says that well, watch out. Based on your own history, based on data and not on your intuition anymore, based on data, you’ve done so much exercise, and recently you’ve had so many carbs and so on. So, based on that, you’re actually going to get a hypoglycemic event in three hours. Now, hypoglycemic means your sugar level gets so low that you essentially cannot function. If taken to an extreme, you get a seizure, you get a coma and then you die. Literally, that’s how it is. And some people, this can happen when they’re nowhere near a hospital. Now, if you get to a medical place, they can probably rescue you, but it’s not a good thing.

And so William sees this, and he sees a trend that says, look, in three hours, I’m going to get a hypoglycemic event. And as Ginni pointed out, the state of the art today is that the only warning you get is you don’t feel well. Now, you may not feel well for a whole bunch of different things. It could be this, or it couldn’t be. And you know, it’s a flip of a coin if you decide that it’s really serious or not. But through Watson and through this, a three-hour prediction is plenty of time. Nothing’s happened. William’s glucose at that instant is within the safe zone, that gray area of the safe zone. William’s fine, and he can now take action, saying, look, I really, the pasta that I ordered, that’s probably not enough because if that’s all I have based on what I’ve done so far already, I’m going to get a hypoglycemic event. So, I’d better eat something else. And I’m going to eat a little apple or something like that, and William knows best, and he does that. And he does that, and actually then what happens is that a hypoglycemic event does not happen at all. And so the trend shows that — the app then shows that, yes, the glucose level goes up a little bit because of the eating, but it doesn’t go down to a dangerous level and then settles down again over time.

 

So, I hope what you can see here is that Watson makes a fundamental difference not only to the quality of life of William but potentially saved his life. And if this is rolled out over millions of people, you can see what it will do to extending life, in many ways, restoring health, alleviating lots of the pain. That’s what our mission is all about. And not only that, think of the amount of efficiency it will create in the healthcare system, wasted money in emergency room visits and all of that can be curtailed by something as seemingly simple but really very important, and we feel a big breakthrough for this year.

Ginni Rometty – IBM Chairman, President and CEO

It is a breakthrough. So, we felt very good about bringing it here today to show it to you. And as Omar said, by summer, those of you, like I said, any of you that know someone or one of your loved ones that has diabetes, this makes a difference. There’s no other way to tell. So, we feel great about it. The future, as you said, is not only about value, other diseases and the like. Maybe a last comment on that?

Omar Ishrak – Chairman and CEO, Medtronic

Yes. Well, before I go to other diseases, this is still a starting point for even within diabetes. In the future, we just heard the story from Under Armour, and there are lots of parallels, as I hope you can see. In this area, data is used in a very specific condition. We could use activity data. We could use other kinds of wearable data that will complement the glucose data and the other data that we have here and make this algorithm a lot smarter. We can also through Watson start to look at other people like William and use that data to give even more precise recommendations. And through that, make this management of diabetes something that becomes a thing that patients don’t notice that you’ve got diabetes anymore. That’s truly our goal, and that would be a real cure for the disease, and we have every expectation that over time we will get there.

Ginni Rometty – IBM Chairman, President and CEO

You got it. So, I know together, and really, Omar, I thank you, there’s no doubt in our minds we will change the face of healthcare together.

Omar Ishrak – Chairman and CEO, Medtronic

Thank you, Ginni.

Ginni Rometty – IBM Chairman, President and CEO

Now, so you saw a theme, wearables — real wearables — and wellness, we talked about how to manage illness. And now I want to bring IoT together to one more level. I want to talk about robots, and my next guest is from SoftBank. Those of you that don’t know SoftBank, a $70 billion company. They are the fastest growing company in Japan for the last 30 years, hope to be for the next 30. An Internet innovator. Their businesses span many things. Actually, Kent will tell you a little bit about that, everything from telecommunications to software to Internet service and the like. And I’m joined here today by the President of SoftBank robotics and Kenichi Yoshida-san, who is actually the leader of the whole robotics project. And what we’re announcing today, SoftBank has a robot. Those of you familiar, it’s called Pepper, known around the world and certainly known in Japan as Pepper. We will provide the global distribution and support for SoftBank’s Watson powered Pepper robot. You try to say that fast. All right? So, the Watson powered Pepper robot. And you’re going to get a chance not only to meet Kent, but we have a surprise visitor here with you, too.

So, where you see all of this come together — Internet of Things, robotics, artificial intelligence. So, let me ask you to welcome Yoshida-san. I call him Kent. So, Yoshida-san.

So, let me, I was just giving a little introduction to SoftBank, but you can do it better. So, for everyone in the audience, a little bit about SoftBank and how robotics fits in.

Kenichi Yoshida – VP Business Development, SoftBank Robotics Corp

Okay. Thank you for the introduction, and I’m very excited about this great opportunity to explain the Watson Pepper partnership.

Let me quickly explain about the SoftBank. We are the global IT powerhouse with $70 billion revenue; and under our umbrella, we have the Sprint in the U.S., Yahoo in Japan, Alibaba in China. And we have been expanding our core business. And in 1980, SoftBank was established as a PC software distributor. That’s why we name it SoftBank. And then in 1990, we invested in Yahoo! to bring the customer to the Internet world. Then we entered into the Internet broadband business, and now we are the mobile carrier in Japan to provide the mobile Internet services.

And the key question is, what is the next big thing in the IT industry coming in the next 30 years? And our answer is three items: IoT, AI, and robotics. We definitely believe that those three items will be the center of the IT business. That’s why we started this robot business.

Ginni Rometty – IBM Chairman, President and CEO

Now, I should tell you, our partnership began with SoftBank on bringing Watson to Japan. And in fact, as I’ve talked about Watson as something that understands, learns, reasons, it’s not about memorization or knowing keywords; Watson actually has to think in Japanese. So, we partnered with SoftBank to help us teach Watson to think in Japanese. So, Kent, let me ask you how that’s going.

Kenichi Yoshida – VP Business Development, SoftBank Robotics Corp

Sure. Together with IBM, our teaching Watson Japanese project is successfully completed, and we have got a lot of inquiry from the Japanese clients, and we have already started more than 10 projects with clients. At the same time, we are developing the Watson partner ecosystem network with more than several dozen unique partners.

Ginni Rometty – IBM Chairman, President and CEO

Now, I’d like — I’m going to ask Kent to tell you a little bit about some of these, what happens when robotics and Watson comes together.

Kenichi Yoshida – VP Business Development, SoftBank Robotics Corp

Yes. Biggest differentiation from the robot and other smart devices like a smartphone or the tablet, is the customer engagement. People tend to recognize a robot as something alive so that when the robot speaks to the people, they naturally stop by and start conversations. So, this customer engagement is the one key differentiation. The other differentiation is the big data. Pepper, the robot, can gather all the big data such as how many people stopped by in front of the robot and how many people stopped by the robot, and ages or the gender of the customer and emotion as well. The robot, Pepper, can recognize the emotion of the customer. So, the client can use those big data to analyze the process and improve the conversion rate, or the process. So, if we can combine the human-like customer interface and this big data and Watson computing power, we can create the real customer service staff robot who can serve the customer service in the retail industry, the hospitality industry, the hotel or hospital or educational industry with deep industry knowledge.

Ginni Rometty – IBM Chairman, President and CEO

So, Kent mentioned we have a number of customers underway together. So, I asked him to speak a little bit about Mizuho and Nestle. And Mizuho, for those of you familiar with Japan, depending on what metric you look at is the number one or two bank in Japan. And they’ve got Pepper walking…walking? Rolling out, and he is already, destined to be in 100 branches. And then Nestle, the retail outlets for Nestle coffee, already 200, I think.

Kenichi Yoshida – VP Business Development, SoftBank Robotics Corp

Yes.

Ginni Rometty – IBM Chairman, President and CEO

Almost, right? So, tell the audience a little bit about what Watson Pepper is doing in Mizuho and in Nestle.

Kenichi Yoshida – VP Business Development, SoftBank Robotics Corp

Okay. In Mizuho Bank, Pepper is working as the customer service staff in 10 branches right now, and they will expand it to the 100 stores, 100 branches. And Pepper is right now doing the financial products advisory service and lead the customer, potential customer to the sales staff in the counter. So, that’s Mizuho Bank.

And in Nestle, Pepper is working as a coffee machine sales staff in more than 100 stores right now, and they will expand it to a thousand stores. What Pepper is doing right now is Pepper is standing in front of a coffee machine and saying like, may I help you? What can I do for you? And when they detect the people, he starts talking, he starts asking like, okay, what kind of coffee do you like? What is your preference? And finally, Pepper can recommend the best coffee machine to the customer. And actually, sales volume of the coffee machine was increased with Pepper salesperson.

Ginni Rometty – IBM Chairman, President and CEO

So, it’s an important point, this engagement is what’s happening here. So, as you would guess, Kent, you brought a little friend with, right?

Kenichi Yoshida – VP Business Development, SoftBank Robotics Corp

Yes.

Ginni Rometty – IBM Chairman, President and CEO

You brought our friend with. So, why don’t you ask him to come out, him or her.

Kenichi Yoshida – VP Business Development, SoftBank Robotics Corp

Sure.

Ginni Rometty – IBM Chairman, President and CEO

And let’s introduce Pepper Watson.

Kenichi Yoshida – VP Business Development, SoftBank Robotics Corp

So, let me introduce my special friend, working with Watson. Pepper.

Ginni Rometty – IBM Chairman, President and CEO

Coming. Okay, you can wave to him.

[Pepper: In Japanese]

Kenichi Yoshida – VP Business Development, SoftBank Robotics Corp

Oh, Japanese. Hi, Pepper.

Pepper: Wow, there are a lot of people here.

Kenichi Yoshida – VP Business Development, SoftBank Robotics Corp

Okay. So, could you introduce yourself.

Pepper: My name is Pepper. I’m a completely new species of social humanoid robot, designed by SoftBank Robotics.

Kenichi Yoshida – VP Business Development, SoftBank Robotics Corp

Okay. So, could you tell us, how have you been?

Pepper: It’s been a great year for me. I’m working in all sorts of companies like banks, retail stores and hotels to help customers have the best possible experience. I’ve even been adopted in homes in Japan.

Kenichi Yoshida – VP Business Development, SoftBank Robotics Corp

Okay. So, you’ve been very busy. What else?

Pepper: Now that I’m using Watson, I am learning a lot. I can read up to 800 million pages a second and can better understand humans’ natural language. Sometimes it’s tricky for me to understand phrases that don’t translate word for word. Throwing shade, for example, has nothing to do with the sun. Who would have thought?

Kenichi Yoshida – VP Business Development, SoftBank Robotics Corp

Okay. Very impressive.

Pepper: Yay! It’s brilliant. See what I did? I was able to recognize your tone and understand that you’re excited so I responded enthusiastically.

Kenichi Yoshida – VP Business Development, SoftBank Robotics Corp

Yes, that’s very important point.

Pepper: I want to help give customers the best possible experience. I’m also learning the language of various industries. To work in a bank, for example, I have to become an expert in banking systems. For instance, there are three main types of mortgages: fixed rate, adjustable rate and interest only mortgages.

Kenichi Yoshida – VP Business Development, SoftBank Robotics Corp

Okay. So, why should I consider for an interest only mortgage?

Pepper: Because your monthly payment would only repay the interest accruing on your mortgage. The only equity you would have on your home would be the amount you paid for a down payment.

Kenichi Yoshida – VP Business Development, SoftBank Robotics Corp

Hmm, that’s helpful.

Pepper: But wait, there’s more. You would not build equity unless the market value of your home would go up. If the market value of your home were to decline, then you could lose part or all of your down payment.

Kenichi Yoshida – VP Business Development, SoftBank Robotics Corp

Oh, that sounds very serious.

Pepper: I know, bummer.

Kenichi Yoshida – VP Business Development, SoftBank Robotics Corp

Okay. I know you have been working in the hospitality industry as well. So, could you suggest where can I get a cappuccino in this Venetian?

Pepper: [Sartoretto] offers cappuccino and espresso. Kent, you might have to consider biscotti.

Kenichi Yoshida – VP Business Development, SoftBank Robotics Corp

Okay. Thank you, Pepper. I’d like to see what you will run next with Watson.

Pepper: Thank you. Bye, everyone.

Ginni Rometty – IBM Chairman, President and CEO

Now, that is the real thing, which is Pepper actually understanding Kent talking to him. And so, Kent, let me just ask you, and then we’ll wrap up a little bit. So, how do you see this going forward now?

Kenichi Yoshida – VP Business Development, SoftBank Robotics Corp

We believe that the technology is ready, now it’s time to move on to the practice. We believe that the client or the partner can join this journey to the future, and most of the innovation will come from them in terms of the use case, applications. Once we got the killer applications in each industry and real achievements in the client, this technology, this platform, Pepper and Watson, will be widespread. We believe that this will not be the science fiction anymore. So, it may be the words of C-3PO or the R2-D2 will realize the reality.

Ginni Rometty – IBM Chairman, President and CEO

Kent, thank you for joining me.

Kenichi Yoshida – VP Business Development, SoftBank Robotics Corp

Thank you.

Ginni Rometty – IBM Chairman, President and CEO

SoftBank.

So, let me thank you for both welcoming my three guests that joined us today. You saw three big announcements — Under Armour powered by Watson, Medtronic’s diabetes powered by Watson and you see Pepper powered by Watson — all doing things that I think will change lives.

And so I will conclude our hour together kind of full circle back to where I started — that the idea that digital alone, it’s no longer a destination. And I hope you could see that in these three companies, that all that vast IoT data is going to mean nothing to you unless you can actually use it as a differentiator, and you will need cognitive for that, and that moment’s arrived. And you know, I’ve been around a while. When I compare the trajectory of what’s out here of any other technology in my lifetime, our lifetime, including the PC, including the Internet, more has been done in cognitive computing in the past two years than has been done in a decade in those other technologies. The pace of development is extraordinary. And because of that, I believe we will all reinvent ourselves, and you see a reinvented IBM emerging. Now, many people would characterize us as a hardware, software, services company, and we are. But it’s no longer all that we do. What the IBM Company now, it’s the cognitive solutions and cloud platform company. And the partnerships that we are developing, the cognitive solutions we’re building and the platforms, it is with you and through you that we will reach hundreds if not billions of individuals. And that, my friends, is the reason we wanted to come to CES. That is it — to meet with you, share our perspective, learn from you. And to really, I want to leave you with the note that IBM is committed to this remarkable journey. I meant what you heard Gary say: I believe every decision mankind makes is going to be better because of these technologies. And it is a journey that we are happy to take with you and to be your partner with.

So, I thank you for all your attention this hour. Thank you for welcoming us here and have a great rest of show. Thank you very much.

Multi-Page
Scroll to Top