Director, IBM Research - India & Chief Technologist, IBM India/South Asia talks at length with virat bahri of B&E on IBM’s Vision 2015 and the future of business analytics
B&E: Tell us about the Big Bets happening out of IBM India research and their implications.
MG: The research division globally places what we call big bets in certain technology areas, which usually means a $100 million investment over a five year period. There are two big bets where we are making very significant contribution. The first is the mobile web big bet. It was the first instance where a non-US lab was asked to drive the big bet. Two main reasons why India given leadership – the first is the innovation that our research team has shown. Secondly, in India, there is a revolution happening in the mobile space, both in terms of mobile phones becoming ubiquitous and in terms of the business models. They are Indian telecom companies which are under stress due to price wars but still making money at ARPUs of $5, where companies in the US are losing money at ARPUs of $50. One of the key innovations that Bharti did was to outsource IT infrastructure and network (considered core at that time) to focus on acquiring customers and maintaining relationships with them. When I give talks to universities in India, students have that perception that we take research from US and apply in India. I cite Bharti’s example and ask them, how many US companies do they know with over 100 million mobile phone subscribers. We have been a key partner of Bharti and provided certain services like billing et al at fractions of amounts that other telecom companies end up spending in the US. We have developed technologies like Snazzy and have already completed planning for Bharti when it crosses 200 million subscribers.
B&E: Research is normally perceived as a cost in most companies. How do you measure research outcomes?
MG:We have fairly well defined processes to measure the impact of research on IBM’s businesses and clients. We define research division accomplishments of different kinds – base level accomplishment, outstanding accomplishment and extraordinary accomplishment. There’s one accomplishment most common – business impact… where we measure whether the research help create more revenue for IBM or helped IBM save money. You have to have atleast $10 milion of impact before it is considered a RDA, next level is $100 million and then it is $1 billion. Another accomplishment is scientific impact. Have we created a new field or established a new direction for the research community? We also talk about Horizon 1 2 and 3. There are some projects where we are looking for an impact this year, some where we look at 5 years and there are technologies where we know we won’t make money on for the next ten years, like quantum computing.
B&E: IBM’s engineers were criticised for many years as being disconnected from the market. How is that changing now?
MG: Many many years ago, research was corporate funded and research teams would do what they wanted to do. Often there would be technologies that we would develop and competitors would take them to market first. IBM Research’s Edgar Codd developed relational databases, and yet who made the most money – Larry Ellison and Oracle! We have started working very closely with our product teams. Now we are also working very closely with clients. We now believe that true innovation has to be done in an open, collaborative manner. It has to be global and multi-disciplinary. Once you understand your clients you can come up with insights that are important.
B&E: Tell us about the Big Bets happening out of IBM India research and their implications.
MG: The research division globally places what we call big bets in certain technology areas, which usually means a $100 million investment over a five year period. There are two big bets where we are making very significant contribution. The first is the mobile web big bet. It was the first instance where a non-US lab was asked to drive the big bet. Two main reasons why India given leadership – the first is the innovation that our research team has shown. Secondly, in India, there is a revolution happening in the mobile space, both in terms of mobile phones becoming ubiquitous and in terms of the business models. They are Indian telecom companies which are under stress due to price wars but still making money at ARPUs of $5, where companies in the US are losing money at ARPUs of $50. One of the key innovations that Bharti did was to outsource IT infrastructure and network (considered core at that time) to focus on acquiring customers and maintaining relationships with them. When I give talks to universities in India, students have that perception that we take research from US and apply in India. I cite Bharti’s example and ask them, how many US companies do they know with over 100 million mobile phone subscribers. We have been a key partner of Bharti and provided certain services like billing et al at fractions of amounts that other telecom companies end up spending in the US. We have developed technologies like Snazzy and have already completed planning for Bharti when it crosses 200 million subscribers.
B&E: Research is normally perceived as a cost in most companies. How do you measure research outcomes?
MG:We have fairly well defined processes to measure the impact of research on IBM’s businesses and clients. We define research division accomplishments of different kinds – base level accomplishment, outstanding accomplishment and extraordinary accomplishment. There’s one accomplishment most common – business impact… where we measure whether the research help create more revenue for IBM or helped IBM save money. You have to have atleast $10 milion of impact before it is considered a RDA, next level is $100 million and then it is $1 billion. Another accomplishment is scientific impact. Have we created a new field or established a new direction for the research community? We also talk about Horizon 1 2 and 3. There are some projects where we are looking for an impact this year, some where we look at 5 years and there are technologies where we know we won’t make money on for the next ten years, like quantum computing.
B&E: IBM’s engineers were criticised for many years as being disconnected from the market. How is that changing now?
MG: Many many years ago, research was corporate funded and research teams would do what they wanted to do. Often there would be technologies that we would develop and competitors would take them to market first. IBM Research’s Edgar Codd developed relational databases, and yet who made the most money – Larry Ellison and Oracle! We have started working very closely with our product teams. Now we are also working very closely with clients. We now believe that true innovation has to be done in an open, collaborative manner. It has to be global and multi-disciplinary. Once you understand your clients you can come up with insights that are important.
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Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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