IBM-AWS Software Agreement: Alliance Update with IBM’s Tom Rosamilia – The Six Five In the Booth

The Six Five In The Booth at AWS re:Invent 2022. Patrick Moorhead and Daniel Newman sit down with Tom Rosamilia, SVP of Software, IBM. Their discussion covers:

  • Progression of IBM-AWS software agreement
  • Highlights and advancements of the agreement
  • IBM’s Embeddable AI strategy and how it may be leveraged with AWS

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You can listen to the conversation here:

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Patrick Moorhead: Hi. This is Pat Moorhead and we are live in Las Vegas at AWS re:Invent in the IBM suite. I’m here with my incredible co-host Daniel Newman. Daniel, we are here. We are back. This place is hopping.

Daniel Newman: It absolutely is. It’s quieter here than you saw when we were on the floor doing the videos and all of the energy.

Patrick Moorhead: That’s right.

Daniel Newman: Got to say, I kind of like the calmness for these kinds of conversations, but Pat, AWS re:Invent is always a hot moment. It’s a big event, and as analysts, something that we have to be paying attention to. Because this is really shaping what’s going on in the market with cloud, with the advancement of the enterprise.

Patrick Moorhead: Absolutely. I’m really enjoying the maturity of the cloud. The cloud is 15 years old. It’s a teenager. It’s not all the way there in adulthood, but it’s getting here. That brings us … Let’s introduce our guest, Tom Rosamilia. How are you doing?

Tom Rosamilia: Not a teenager. I’m doing great. Happy to be with you guys again.

Patrick Moorhead: It’s great. Gosh. We’ve had Tom multiple times on The Six Five. It’s great to see you again. Maybe for the audience, we’d love to hear … For those who don’t know you, what’s your charge at IBM? What are you focused on? What’s your span of control?

Tom Rosamilia: My focus is software. I have the privilege of running the software business for IBM. I’ve been doing that for about 18 months now. Prior to that, with hardware. When you and I first met.

Patrick Moorhead: That’s right.

Tom Rosamilia: But it’s a real great challenge and a privilege and an honor to do it. My boss has called the play. It’s all around hybrid cloud and AI. We’re fully embracing that. The great thing is everybody in IBM can get behind it. Everybody can find themselves in the strategy, so there’s really very little confusion. There’s a lot of focus. With all the moves we’ve made, he’s made, with the acquisition of Red Hat, with the spin-out of Kyndryl. This shift really to ecosystem of partners like AWS has really helped us.

Patrick Moorhead: It’s been an incredible run. I’ve been in and around IBM for, gosh, 32 years now. Competed with IBM in 1990, but watching the growth and the changes. It really has been an amazing thing to watch. Thanks for making our analyst firms look really smart. Congratulations on the success.

Tom Rosamilia: That was our goal.

Patrick Moorhead: I know, Tom. It’s all about us. We’re in the analyst business.

Daniel Newman: Somehow when they were in the war room figuring out their earnings announcement, I’m sure they were like, “That Pat and Dan.”

Patrick Moorhead: I know. I know.

Daniel Newman: But in all serious, there is a lot to be proud of right now. I remember listening the other day on CNBC. There was a comment about a 52-week high for the company. Obviously, you said, I think you and I backstage, something about, “We do really well in rough waters.” It’s a tough time. Even going back six months ago, we sat … It was right around six months ago.

Patrick Moorhead: Yup. In Boston.

Daniel Newman: I can’t believe how fast that’s gone.

Tom Rosamilia: I know.

Daniel Newman: But we came to you and you were actually just announcing a big partnership that IBM was rolling out with AWS. Here we are at AWS re:Invent. Talk a little bit about that. Where is that partnership at?

Tom Rosamilia: Well, we started about a year ago and signed our strategic agreement in May to collaborate on moving our software. Lots of IBM software available on AWS, but now to make it available as a service on AWS. Rather than bring your own license. And so, we announced back then 19 products. Now, it’s up to 20 products that will be available on AWS as a service. Since then, in August, we’ve been teaming with IBM Consulting on bringing these patterns to life and to our clients, which is great.

We made some strategic announcements around enabling partners, VADs and VARs, or value-added distributors and resellers and global system integrators, to be able to take advantage of and get credit for selling our software on AWS, which is a big breakthrough for them and for us. Lots have happened. Back then, I was telling you that there were about 10,000 certified practitioners within IBM consulting. Now, it’s up to 15,000. They’ve added 50% more skill.

Certifications really matter to partners. They know you’re investing and they know you’re committed when you get that many people certified in the technology. Today, we’re making a three-in-one beta product available as a service. And so, things like App Connect and things like Content Services, Envizi, and a beta around some analytics work that we’re doing with planning analytics. That should be available in the first quarter, so pretty soon. We’ve gone from zero to four eventually to 20 products and there’ll be more. It’s been a great journey. I really value the partnership I’m getting from Amazon.

Patrick Moorhead: A lot of progress. I know some people might say, “Well, IBM, they don’t move quickly.” I have to tell you. This is quick. The fact that it’s one year. This is not some 10-year, five-year, and we’re here now. You have products that are going, that are ready. That are going GA.

What I love about it the most is it’s really hitting … We call it trends, but it’s what clients are looking for. No longer are we debating if the future is hybrid. It’s hybrid. Okay? Some people are debating if it’s multi-cloud, but those are typically people who don’t want there to only be one cloud. But the fact is, I’ve never talked to a Fortune 1000 client that wasn’t on multi-cloud. It is the reality.

Tom Rosamilia: The data would say it’s greater than 90%. We can debate whether it’s a 100% or 92%.

Patrick Moorhead: Right.

Tom Rosamilia: They’re multi-cloud and they’re going to be. That’s really the shape of the world. They’re going to be hybrid. We’re seeing great collaboration. I was just talking to a client here about spanning their mainframe to AWS and being able to use some of the same software in both places, have the same skills, and unlock the potential that they get from both IBM and AWS, which is great.

Patrick Moorhead: Rob Thomas talked about embedded AI or embeddable AI. Can you talk a little bit more about that and how it relates to what you’re doing with AWS?

Tom Rosamilia: Actually, we made three libraries available largely to ISVs. These came out of IBM research. They’re things like NLP, natural language processing. Text-to-speech, speech-to-text, and some the capabilities around supply chain. We don’t talk about AI as a thing anymore. It’s embedded in a lot of what we do.

A lot of the products that we are making available have embedded AI in them. We had ISVs, independent software vendors, who wanted to do the same. We’re making those available to them, so they don’t have to write their own. We have some of the best researchers around speech and NLP. And so, by making those features and capabilities available, lots of people can do it. I think it’s a great way of showing that it’s AI everywhere.

Daniel Newman: Do you see … Because I was listening to the Adam Selipsky keynote this morning. Data was in focus. There was a few other things, but data was one of the things that are in focus. And of course, what you said hit home to me. AI is no longer like a category. AI is something that has overlaid everything in technology.

With what Rob talked about, that was within the IBM ecosystem. But within the IBM plus AWS ecosystem, do you see that progressing into the public cloud and into those partnerships?

Tom Rosamilia: I think it’s possible. I think what’s closer to see is that the products that we’re making available on AWS have the embedded AI in them. Products like Envizi for environmental use AI. Our security suite absolutely uses AI in figuring out what the bad guys are trying to do and looking for patterns. It’s everywhere now.

Daniel Newman: Seems like observability too, which has been another pretty big focus, would be a big opportunity for you guys to embed AI and make it available?

Tom Rosamilia: Absolutely. We’re really pleased with what progress we’re seeing with Turbonomic and Instana. Instana being not the market leader yet, but one designed for containers, which is great. And Turbo really being a market leader around resource management and the ability. By the way, we are making it available with Envizi.

Part of the way you can lower your carbon footprint is turning down things you don’t need to use. And so, Turbo resource managing your way to better outcomes. You can even imagine saying, “I’ll run it in this data center versus that data center, because I have a lower carbon footprint. Because the electricity there comes from wind. Over here, I’ll make it come from coal.” Your carbon footprint could be modified depending on where you put the work.

Patrick Moorhead: Tom, we’re early days here in AI. First of all, to have a good AI strategy and implementation, the data’s got to be clean. It has to be good. Not all data structures work best with AI. In fact, analytics can do a lot now. The way that I like to explain AI to the layperson is it’s an advanced version of analytics that’s using different algorithms and big data.

Tom Rosamilia: I told you that.

Patrick Moorhead: Did I lift that off you and give you zero credit? I may have. If I did, my apologies. I’ll be sure to credit you next time. My macro question though is … Do you see this speeding up everything for the enterprise? We see AI and ML being used in consumer, big hyperscaler applications, but it’s not nearly as fast as it is in the enterprise. You’re offering a PaaS service here. You’ll do anything as a service. But it seems like this would speed everything up for enterprises?

Tom Rosamilia: I think it will. I think the greater access to this technology, the better. The faster it’ll go. I have said it. I’m sure you came up with it yourself as well, but I think in some ways the industry chose to call it AI. And in some ways, it scares people. If we just said it was analytics plus, plus, plus … It probably would’ve been fine. But embedding it in different places. I’ll give you an example.

Daniel Newman: 5GE.

Patrick Moorhead: Exactly. Or 5G+.

Tom Rosamilia: 5G+.

Daniel Newman: 4GE. Whatever.

Tom Rosamilia: We’re working with McDonald’s on automating their drive-throughs. It’s speech recognition and figuring out what your order is. I got to see the demo, it’s really … You probably saw it.

Patrick Moorhead: We did at Think.

Tom Rosamilia: We had it at Think.

Patrick Moorhead: It got my entire order correct. It didn’t want to remove my pickles for some reason.

Tom Rosamilia: Well, we’ve probably worked that out since then. And it’s a really hard job to work in a drive-through. You do that for a couple of hours, and it’s just exhausting.

Patrick Moorhead: I did it. I did it as a kid. It’s tough.

Tom Rosamilia: There you go. There you go. Automating some of these jobs that not everyone wants is a good way to do it. But I don’t think AI is this bad thing that’s going to put people out of work. I really don’t. I think it’s really enabling people to work differently. Automating back office operations and HR functions and things like Watson Orchestrate that people can go in. You can even do some level of recording. Say, “I’ll do these steps. Watch me do them. Do it again a thousand times.”

Patrick Moorhead: There has to be something in supply chain. What I love about this is you’re hitting on the biggest conversations in the C-suite. This is what customers care about. It’s human capital. Whether it’s frontline workers or it’s information workers or it’s supply chain. Everybody’s spreadsheets in supply chain are changing. It would seem, because that is a big data problem, it has a lot of history behind cause and effect. And it’s multivariate. It seems like we could do something with that.

Tom Rosamilia: Absolutely. I think AI’s really going to help us with … Despite some downturn in tech firms and hiring, we still have a shortage of technology people. And so, we’re going to need to make this simpler. We’re going to need to make it more accessible for people, and we’re going to need to automate as much as we can.

Daniel Newman: Tom, you said so many sage things. I love that you talked about the spreadsheet. We’re going to have to wrap up here, but when I wrote Human/Machine, we actually studied this one very thing, Tom. In the future, is automation replacing and displacing? Or is it augmenting?

I think the answer is, “If we do it right, it’s augmenting.” As we saw with the talent shortage of these past few years, we threw a lot of bodies at problems and we ran out of bodies. That’s actually what happened. Now, we actually have to go back and finish all these projects, which is a great opportunity for IBM and I think part of why you’re doing so well. So congratulations, Tom.

Tom Rosamilia: Thank you. We’ll stay humble.

Daniel Newman: Loved having you here at AWS re:Invent in the IBM suite on The Six Five. Got to get all those things in there.

Patrick Moorhead: I know.

Daniel Newman: We appreciate you. Veteran to this show. We’ve got to have you back sometime soon.

Tom Rosamilia: Appreciate it, guys.

Daniel Newman: Thanks, Tom.

Tom Rosamilia: Thanks again.

Daniel Newman: Well, everybody, thank you so much for tuning in. Hit those other episodes of the IBM episodes of Six Five in the booth, on the road, in the suite.

Patrick Moorhead: Pretty much everywhere. IBM suite. This is a new product.

Daniel Newman: We’re everywhere. At AWS re:Invent. We really appreciate you tuning in. We’ll see you again really soon.


Author Information

Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.

From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.

A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.

An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.


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