IBM Greater China CEO Bao Zhuolan: IT industry will become “quantum computing world” in 5 years
2020 is destined to be the year that will be written into the annals of history. The global outbreak of the new crown pneumonia epidemic has triggered the circuit breaker of US stocks, the birth of “negative oil prices”, and the “bankruptcy tide” of enterprises. Various crises are being staged in turn… How to survive the crisis safely has become a problem that many companies have to think about. important proposition.
“The epidemic is a ‘Darwinian moment’ and a test of ‘survival of the fittest’. Some companies have failed and disappeared. Others have been able to withstand the test of the crisis and become stronger.” IBM Greater China CEO Bao Zhuolan said in an exclusive interview with the 21st Century Business Herald reporter.
Bao Zhuolan believes, “After this crisis, governments of various countries and regions have reached a consensus that realizing enterprise digitization has become a top priority.”
In addition, Bao Zhuolan had a dialogue with 21st Century Business Herald reporters in an exclusive interview on how Chinese companies should turn danger through digital transformation, IBM China’s investment strategy, and the future development trend of the IT industry.
Digital transformation is imperative
“21st Century”: The epidemic has had a huge impact on the global business environment. How does this affect IBM and IBM’s customers?
Bao Zhuolan: Indeed. For the world, this outbreak is like an earthquake. In fact, in China, IBM was one of the first companies to take action against the epidemic. We have taken many unprecedented measures, including purchasing masks, alcohol disinfection, temperature screening, and more.
Of course, our number one priority is the health of our employees and customers, which is always our number one priority. We must respond creatively. There was no coping guide at first. Later, the government issued anti-epidemic guidelines, which we strictly followed. And, we are fully prepared. Facts have proved that the Chinese people’s anti-epidemic achievements are astonishing. Ultimately, we believe this outbreak has profoundly impacted global business and economies. In my opinion, this epidemic is a “Darwinian moment” – a test of “survival of the fittest”, with some companies failing and disappearing. Others were able to weather the crisis and emerge stronger.
I believe that after this crisis, governments of various countries and regions have reached a consensus that realizing enterprise digitization has become a top priority. This is no longer an optional option, but an essential element. Businesses must go digital if they are to emerge stronger post-pandemic.
“21st Century”: As we all know, China plays an important role in the global supply chain, and this epidemic is obviously destructive. So, how can IBM help businesses become more agile and resilient, and better manage supply chains?
Bao Zhuolan: We provide key solutions for this. In summary, we are currently focusing on five solutions. One of them is agile supply chains.
We believe that supply chain agility is very important. When there are problems in the supply chain, enterprises can make flexible adjustments in time. Everyone has seen the impact of the outbreak on the supply chain. Businesses have even closed due to the pandemic. So, how can we adjust the supply chain without affecting the normal operation of the business? Not only do we already have technical solutions. And we’re incorporating AI into every aspect of the solution, so “agility” isn’t just a piece of paper, it’s a real capability.
Clearly, we need to leverage the benefits of AI and cloud technology to help our customers continue to operate and increase agility. Once customers get used to this approach, they will also use it as an important asset post-pandemic. The way people were doing during the pandemic became the new normal after the pandemic. The key is that we hope to help customers survive the “Darwin Moment” – this test of “survival of the fittest”, withstand the epidemic storm, become stronger, and meet the “new normal” with confidence.
The Chinese market is still promising
“21st Century”: IBM seems to be building a digital sales center to practice its own proposition. What is the reason behind this? What is the current progress?
Bao Zhuolan: We are very excited to share the news – the establishment of the IBM Digital Sales Center. Obviously, compared to face-to-face communication, the ability to reach more customers in a digital sales center is particularly obvious during the epidemic. We haven’t been able to communicate face-to-face with our customers for a long time. Now that work and life in China have returned to normal, we can travel again. But it was completely illiquid for about three months. So the digital sales center is really an effective way to keep in touch with our customers, allowing us to continuously provide solutions to our customers.
It’s also a way for us to develop talent, because there are a lot of very young talent in the digital sales center, belonging to “Gen Y” and “Gen Z.” They approach customers in a completely different way. This is a great opportunity for both us and our customers.
“21st Century”: China has a vast territory and many enterprises. How do you work with local partners to expand IBM’s reach and reach?
Bao Zhuolan: As we all know, in order to develop the hybrid cloud business, IBM acquired Red Hat (Red Hat). Today, we are a system, as a company, that helps customers move from one cloud to another with agility. All thanks to the Openshift platform. We call it the “fourth platform”.
Right now, we need to make sure that it’s not just an IBM solution, but also that it’s a solution for China. The only way to do this is for some ecosystem partners to build their own solutions using this technology, which is the most important thing for us. For example, Alibaba Cloud joined the list of “IBM Certified Public Clouds”. This is a good example.
Recently, Digital China has officially become an important business partner of Red Hat. We will provide Red Hat Openshift based solutions to the wider region of China. We will continue to enhance and optimize this solution. We also established an Inspur Commercial Machinery Co., Ltd. with Inspur to provide Power products and services to the Chinese market. The joint venture has made great strides in public sector, rural, remote and broad industry markets. Let our solutions benefit more Chinese enterprises.
“21st Century”: The latest data shows that China’s GDP growth rate in the second quarter was 3.2%, becoming the first major economy in the world to return to positive growth under the epidemic. How is the recovery of IBM’s business in China?
Bao Zhuolan: We hope to fully adapt to the opportunities brought about by the rapid recovery of China’s economy. Moreover, IBM also attaches great importance to the Chinese domestic market. Not only do we want to focus on the local Chinese market, but we also want to help Chinese companies go global because they need the world market.
In this respect, IBM is uniquely positioned because we operate in more than 170 countries and regions. Which company is more capable of helping Chinese companies expand into the international market than IBM? However, the local market remains promising.
I mentioned earlier that businesses need AI capabilities. Only 18% to 20% of businesses actually use AI in their day-to-day operations. We can help businesses with this. Additionally, IBM is well positioned to support China’s technology infrastructure while focusing on China’s rapidly recovering economy. In fact, our first platform, the mainframe. We have close cooperation with Chinese companies and have won their respect.
There is one thing I want to share. When I was working in IBM France, I found that French companies like IBM very much, but when I came to China, I found that Chinese companies have a higher degree of recognition of IBM. We call this metric “Net Promoter Score”. IBM’s “Net Promoter Score”, or customer satisfaction, in the Chinese market is the highest in the world.
IBM’s localization strategy remains unchanged
“21st Century”: Recently, we often talk about the “new normal”. What do you think of the “new normal”?
Bao Zhuolan: As I said just now, the new normal is the opportunity to make full use of the hybrid cloud to truly transform the business and create a hybrid IT environment. Second, the new normal is “information technology is everywhere”. You can now feel the presence of consumer technology on the street. For example, in China, I see a lot of people ordering food on their phones and paying with their phones. In this regard, China is far ahead of other countries and regions. It is really advanced and convenient for consumers. But it must be reminded not to confuse “enterprise IT” with “consumer IT”.
Now, we want to make this technological advancement available to businesses as well. As I said earlier, only 18% to 20% of businesses use AI technology in their operations. To align supply chains, to truly have a digital workforce, and to build an “immune system” that ensures cybersecurity, businesses need AI. Under the new normal, we hope that not only consumers can enjoy new technologies, but also enterprise-level information technology will develop by leaps and bounds. Companies can take action on these fronts.
There are significant differences between “enterprise IT” and “consumer IT.” why? Because enterprise IT is regulated and constrained by many laws and regulations. For example, the cloud services used by banks are not the same as those used by our consumers. This is not only in China, each country has a series of regulatory measures and regulatory requirements for building industry clouds.
We can provide enterprises with a hybrid cloud architecture that meets regulatory needs and helps enterprises quickly adapt to the “new normal”. So we have a lot of work to do. The data shows that the value of this market is as high as 2 trillion US dollars.
“21st Century”: Due to the impact of the epidemic, there is a so-called “de-globalization” trend in the world. What do you think of “de-globalization”?
Bao Zhuolan: I think whether it is “decoupling” or “deglobalization”, these are the categories of political practitioners.
As I just said. Currently, the IBM business, IBM brand, IBM talent and IBM ecosystem span more than 170 countries around the world. Therefore, IBM is a truly multinational company. We hope to continue operating as a group through the form of a multinational company. But as I said, we’re also very focused on the home market. So even though IBM is a multinational company, we really want to be rooted in China and do business in China in a localized form. Regardless of the country or region in which we operate, we will abide by local laws. Our commitment to using advanced technology and great people to meet the needs of our customers is very important to us and my only (first) thought.
Second, I think we need to take a long-term view. IBM has a 109-year history—very long. We’ve gone through four reinventions and built four platforms. Reinvention after reinvention has brought IBM through multiple transformations. Right now, we are still going through this transition; at the same time, we are also going through extraordinary times like the pandemic. Therefore, I believe that in the long run, our development prospects in China are very bright.
“21st Century”: Will some international thoughts of “de-globalization” affect IBM’s long-term strategy in China?
Bao Zhuolan: I don’t think it has any impact. We are watching the current situation. We comply with various regulations, executive orders and other regulations. Of course, to be blunt, our business will also be affected to some extent. We believe that countries can first strengthen regulation in terms of laws and international trade, and urge all parties to comply.
For corporate business objectives, we expect, at the same time, to protect IT intellectual property. This is very important, and it’s no secret, because it ultimately affects the vital interests of thousands of Chinese employees working at IBM.
I think IBM China is a Chinese company. IBM France is a French company. Therefore, what we need to do now and in the future is to focus on serving our customers and be responsive to their needs.
“21st Century”: How does IBM achieve localization in China?
Bao Zhuolan: It is very important to provide products that are suitable for the local area. Our China R&D center creates localized solutions for the Chinese market, and we also rely on ecosystem partners to achieve this goal.
When a technology like Openshift needs to be incorporated into a very large-scale solution, either Digital China or Alibaba Cloud can create a solution based on Openshift. So as to better serve Chinese customers.
21st Century: You just mentioned Alibaba Cloud. Can you talk about what competitive advantages IBM has over Alibaba Cloud?
Bao Zhuolan: This is a whole new world. We compete with and cooperate with many companies, which is called “co-opetition”. This is the “new normal”. Every business has to adapt to this new normal. There is not only a competitive relationship between enterprises, but also a cooperative relationship.
According to a recent report from Forrester, IBM is the leader when it comes to hybrid cloud strategies. Alibaba Cloud is also among them, but at the top is IBM. Therefore, I think Alibaba Cloud can also take advantage of IBM’s fourth platform to integrate Openshift into the hybrid cloud strategy. This is not competition. We know how to set business boundaries, but we also collaborate.
The IT industry will be the world of quantum computing
“21st Century”: In the current situation, globalization is slowing down. If we still want to do some cooperation on an international level, in which areas or industries do you think there are more opportunities?
Bao Zhuolan: Of course, there are many opportunities in China, and the financial services industry is one of the industries with huge opportunities. It’s also important to have technology that fits the needs of the industry, so we can bring significant value to the industry.
Because 5G is gradually gaining popularity, we can help telecom companies such as China Telecom, China Unicom and China Mobile save a lot of money with the help of hybrid cloud and virtual network technology. So this is also an area where we expect to cooperate. This is also an opportunity for us.
So our primary focus is financial services, followed by telecommunications. In third place is the automotive industry. China has achieved many new technological advancements in electric vehicles, autonomous driving, and more. We not only cooperate with Chinese enterprises, but also cooperate with multinational companies such as BMW and Volkswagen.
I think there are huge business opportunities in these three industries. However, the opportunity in the retail industry cannot be ignored either, as I was the IBM Global Retail Industry Leader in the past. The retail industry is reinventing itself, such as e-commerce.
“21st Century”: Can you look forward to the future of the IT industry?
Bao Zhuolan: We will focus on hybrid cloud. I just explained what the fourth platform is. We also have the courage to try something new. Every attempt is based on great courage.
IBM once coined the word “e-commerce”, and later, e-commerce became popular. For example, the e-commerce story created by IBM was carried forward by Ali, Tencent and Baidu in China.
It is conceivable that in the future, quantum computers will write a new legend in the industry. Five years from now, quantum computing could be on the rise. At that time, all the problems that cannot be solved by microprocessors will be solved, so people need more innovative technology. This will lead to new breakthroughs. Therefore, I predict that the IT industry in five years will be the “world” of quantum computing.
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