March 20, 2013

Rometty: The Third Era and How to Win the Future

Isaac Lopez

The third era of computing technology is at our doorsteps, where machine learning meets big data, said IBM CEO, Ginni Rometty, in a discussion recently at the Council on Foreign Relations.

The first era, says Rometty, was the tabulation era, where computers were used to count different things. The second era was the programmable era, where computers were programmed and told what to do – if this, then do that. The third era, explains Rometty, is the era of big data and machine learning.

Because of the enormity, complexity, and velocity of data, the third era will be about the computer that learns, enthused Rometty explaining her perspective on the emerging new epoch of computing. “It has to be – the information is too big, it’s too fast, you can’t program it. You can talk about security, all these different things. You have no choice. It will be a system that – you can use the word ‘cognitive’, – it has to learn by itself.”

During her visit to the CFR, Rometty also discussed the shift in culture and technology that she believes are a requirement for organizations as technology shifts into this third era of computing. She cited the confluence of cloud, mobile, social, and data as the sources which are driving the changes happening in the way organizations of all types operate.

“I’d like for you to think of data as the next natural resource,” said Rometty. “The only limit is yourself, though – it’s not limited.” Data, says Rometty, can be to the current era what steam, oil, and electricity was to the industrial age.

Rometty outlined three principles that she believes the winners of the new future will adhere to:

#1 – Data will change how organizations will make decisions

Decisions will be made using predictive analytics and data in the future, says Rometty. The days of decision my senior management, intuition, and experience will be replaced with decisions driven by data, she explained citing the success that the Memphis police had with project C.R.U.S.H. (Crime Reduction Using Statistical History), where crime was reduced by 30% by finding patterns in the city’s data.

#2 – The social network within an organization will be its production line

Social networking, says Rometty, will change who organizations hire, how they are compensated, and who they are developed. She predicts that in the near future, individuals will be rated by the information they create, how it is shared, and what its value is.

“You know, you’ve seen it – five stars – maybe I’ll even pay you that way,” she mused. “Five stars, one compensation, two stars, not. It will be a different future.”

#3 – Delivering value will be directed at the individual, not market segments

The shift is taking place already, explained Rometty, where value is being targeted at individuals, and not market segments. “What you will see with the rapid emergence of big data is the death of averages,” she commented. Instead, she says, there will be an era of “you” where consumers are targeted based on predictive analytics.

“If you have a call center, it’s no longer about a script, it’s about a dialogue. If you’re in advertising, its not about a promotion, it’s about a two way discussion to get information.”

Concluding, Rometty waxed philosophically about the cultural and technological intersection that she describes, saying that the greatest contribution of this shift will mean that every organizational entity, be it private or public, will be forced to become an “authentic organization.”

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