IBM(US:IBM)2022-11-29 19:05Summary of IBM's Conference Call at Credit Suisse 26th Annual Technology Conference Company Overview - Company: International Business Machines Corporation (IBM) - Date of Call: November 29, 2022 - Participants: Rob Thomas (SVP, Global Sales), Shannon Cross (Credit Suisse IT Hardware Analyst) Key Points Industry and Company Transformation - IBM has undergone significant cultural and operational changes in the past few years, focusing on growth and cash flow, particularly in hybrid cloud and AI [5][6] - The company has shifted from a singular public cloud strategy to a hybrid cloud approach, integrating public and private cloud solutions [9][10] - Geopolitical factors have increased demand for sovereign and local cloud strategies, aligning with IBM's investments in Red Hat and open-source technologies [10][11] Go-to-Market Strategy - IBM has transformed its go-to-market strategy to focus on technical expertise and client engagement, including the establishment of client engineering and customer success teams [13][14][15] - Red Hat remains an independent entity within IBM, but the company prefers Red Hat solutions in sales cycles to leverage its capabilities [15][16] Consulting Business - IBM has built strategic partnerships with major players like AWS, Azure, SAP, Salesforce, and Adobe, resulting in billion-dollar pipelines [18] - The company has actively hired in the consulting sector and restarted its M&A engine, completing 14 acquisitions in the last two years [19] - Technology is viewed as deflationary, with expectations that technology growth will outpace GDP growth by 2-4 percentage points [19] AI and Innovation - IBM's AI investments focus on natural language processing, automation, and trusted AI, with five key use cases identified: customer service, IT operations, cybersecurity, sustainability, and employee experience [24][25][26] - The company has developed a robust security portfolio, including Cloud Pak for security and acquisitions to enhance its capabilities in extended detection and response (XDR) [30] - Data management innovations include Cloud Pak for data and Data Fabric, allowing for data governance without moving data [31] Mainframe Business - The mainframe is positioned as a core transactional system, with innovations like the Telum processor enabling real-time analytics [35] - Clients increasingly inquire about integrating mainframes into their hybrid strategies, with examples of successful workload consolidation [36][37] Future Outlook - IBM is optimistic about quantum computing, with a 10-year roadmap for enterprise computing and ongoing development of its quantum systems [39] - The company is investing in large language models and AI, with a focus on enhancing cybersecurity through AI capabilities [41][42] - A partner-first model has been established to expand distribution networks and enhance collaboration with partners [47][49] Additional Insights - The shift towards product-led growth aims to convert web traffic into product trials and sales, enhancing IBM's market reach [33][49] - The company emphasizes transparency and collaboration with partners, providing them with insights into IBM's product strategies [45] This summary encapsulates the key insights and strategic directions discussed during the conference call, highlighting IBM's focus on hybrid cloud, AI, consulting, and innovation as it navigates the evolving technology landscape.