IBM to enable digital shift at enterprises

When Alain Benichou, CEO of IBM Greater China Group, returned home in France in early January, he was anticipating a wonderful vacation. But the COVID-19 pandemic suddenly stormed onto the scene and everything changed. Sensing that the situation was deteriorating, Benichou rushed back to Beijing in March to avoid upcoming flight restrictions.

Such urgency and rescheduling of plans are common in the world today as the global community is locked in a battle against one of the world's largest healthcare crises in recent memory. The pandemic is disrupting people's daily lives and work, and creating challenges for millions of companies.

Benichou said the outbreak is likely to be a "Darwinian moment "for the corporate world. Companies that take steps toward digital transformation are more likely to survive and emerge stronger after the pandemic. But for those that can't, they will unfortunately be left behind.

For IBM, the goal is to help more companies survive the crisis by leveraging its digital prowess, he said.

In China, IBM quickly put together five integrated solutions to address pressing pandemic-created challenges among enterprises. As the contagion forces more people stay at home for work, IBM provides solutions for digital workplace reinvention, helping businesses plan for flexible work, optimize their operations and improve the employee experience.

"Many take the digital workplace for granted. But how to access data based at home in a safe, secure and agile way－that is far more complex than some expected and IBM aims to solve such problems," Benichou said.

Kitty Fok, managing director of market research company International Data Corp, said amid the outbreak, companies wanting to create more value need to adopt digital-first operations.

IDC predicted that by 2024, more than 70 percent of China's IT spending budget will be used to accelerate digital transformation, higher than the global average of 51 percent.

But as Chinese companies shift toward virtual and remote activities for their operations, cybersecurity criminals are also creating new tactics to attack organizations. To confront the challenges, IBM came up with cybersecurity solution and services to help its clients in security risk assessment, privacy compliance analysis and cyber protection.

The efforts are part of a broader push by IBM to better serve the China IT market, which is one of the world's largest and most dynamic. Benichou, who took the helm of IBM's China business one year ago, said the outbreak may reshape how local companies run their IT operations.

Currently, most Chinese companies are very proactive in terms of their IT. They buy the equipment and hire people to run the equipment in-house. By comparison, in markets like Japan and the US, companies are more likely to outsource IT services to specialized partners so that they can better concentrate on their core businesses, Benichou said.

As labor costs rise, the outsourcing trend will come to China and "the outbreak may be the trigger for the change," the senior executive said.

Amid the pandemic, demand for cloud computing is already surging as remote work and learning gain traction. Research from Boston Consulting Group and McKinsey show that 67 percent of companies are using a mix of multiple cloud vendors. IBM hopes its expertise can help clients "use the right cloud for the right workload".

"We see huge opportunities from the financing industry, and we are committed to bringing our financial industry-ready public cloud to China," Benichou said. IBM has built a long-term trust with Chinese banks and its data center mainframes have been at the core of China's financial systems for decades.

Collaborative innovation is also taking place. IBM in September introduced IBM Garage Methodology to help Bank of China accelerate its digital transformation and implementation of an innovation-driven strategy.

Meanwhile, IBM has inked deals with leading Chinese brand Anta Sports and well-known liquor maker Wuliangye to help with their digital transformation push.

The deals came after IBM spent $34 billion to acquire Red Hat last year to foster open source innovation and simplify IT through a complete open hybrid cloud. The latest financial report shows that these efforts have paid off. In the first quarter, revenue from IBM's cloud business hit $5.4 billion, up 23 percent year-on-year, adjusting for divested businesses and currency.

The strong performance came as IBM competes with rivals such as Amazon Web Services and Microsoft.

IBM's growing emphasis on cloud computing is also part of the tech giant's transformation into a service provider. Benichou, who has spent 36 years at IBM, said focused innovation and talent are the key ingredients for companies to successfully transform themselves.

"As a business and IT services leader in China, IBM has unique industry and technology expertise to help our clients innovate. That is where IBM excels and we want to share such experience with the China market," Benichou added.