IBM CEO says AI business transformation will take another decade

Mr. Krishna has spent more than three decades at IBM..

Before becoming CEO in 2020, he was Senior Vice President of Cloud and Cognitive Software. One of his key achievements was driving IBM’s acquisition of open source enterprise software company Red Hat Inc. for $34 billion, which closed in 2019.

Since his appointment as CEO, Mr. Krishna has focused on IBM in areas including hybrid cloud computing, AI, blockchain and quantum computing. As part of that new focus, he led the spinoff of IBM’s $19 billion information technology services business last year into a new company, Kyndryl Holdings. Inc.

Here are the edited highlights of the conversation with Mr. Krishna. Parts of this interview appeared in a panel discussion The Wall Street Journal published earlier this month.

WSJ: How has the relationship between business and technology changed over the last 10 years?

Mr Krishna: If we take three to five years as a backdrop, the demographics have changed. Both the nature of work, including where people want to work and how many people want to work and could work, is radically different today than it was a few years ago.

The role of the pandemic, of globalization, of climate change, sustainability, they all play a role in how and where we work. You combine that with the need for omnichannel… against that backdrop, I’d say that technology has gone from being a cost of doing business to one of the fundamental sources of competitive advantage.

If I look at the sources of competitive advantage, 2,000 years ago it was physical resources. Then there was the trade… the things you got from the land, gold, wheat, grain. Then he went to the money. Then you go to knowledge. Throughout the last century we talked about knowledge workers. Today, I think it’s technology. I believe that technology is the fundamental source of competitive advantage today.

WSJ: What technologies are you referring to?

Mr Krishna: hybrid cloud. You must have a place to deploy your technology, and the cloud has given us a better answer than many before. That goes back to scale, ease, flexibility, and lack of friction.

The second one that is upon us, but we are probably only 10% of the way there, is artificial intelligence. With the current amount of data, we know that there is no way that we, as human beings, can process all of it. Techniques like analytics and traditional databases can only go so far.

The only technique we know of that can get insights from data is artificial intelligence. The consumer has accepted it first. The biggest impact will come as companies adopt it. We have some problems. We have to solve ethics. We have to make sure that all the mistakes of the past are not repeated. We have to understand the life science of AI. Otherwise, we will create a monster. I am very optimistic that if we pay attention, we can solve all those problems.

WSJ: In what period of time?

Mr Krishna: 10 years.

WSJ: How have the roles of CIO and technology leader evolved?

Mr Krishna: I think 10 years ago a lot of business leaders felt perfectly competent to make a decision and then the CIO [execute it]. Now, even in my own process (I’m a reasonable technologist), I wouldn’t make a decision without asking my CIO, “What do you think? What does your team think? What do you and your team think is the best answer?”

Ten years ago, we were all looking to optimize that [IT budget], tighten it by 10%. Now, I don’t really care if you spend more, if it makes everyone else more productive. If you can do something that allows me to scale revenue faster, because I can’t hire more people, they just aren’t available to hire, then that’s incredibly useful and valuable. So the CIO is really a partner now, it’s no longer the cost function that I have to irritatingly pay attention to.

I talk to other CEOs, they are much easier now with technologies. They have a much better intuitive sense of what technologies can do. Therefore, they can really be a good partner for the CIO.

WSJ: Has CIO dominance contracted over the last 10 years?

Mr Krishna: I think it actually goes in a circle. Ten years ago they had more control and dominance, but it was kind of, ah, this thing that I don’t have to worry about.

Then it changed. The business line said I need more, I want to go faster, and you had a split. I think that in many top-tier organizations [now], the CIO has complete control, but he has to be a business partner. The business informs the CIO, it helps inform the priority of what is important.

But the CIO is in charge of implementation, the technology shows. Having the discipline, having the career path, having the knowledge of which partners to take, which technologies to take, having the understanding of enterprise architecture, is important. If everyone does their thing in a company, there is no common ground. It is very difficult to share data. You can do one thing, but you can’t do the other nine. So as people have realized the hidden costs of all that, they’ve brought more sanity to the CIO role.

WSJ: What is the biggest challenge facing the CIO and business technology in the future?

Mr Krishna: Cybersecurity is the theme of the decade. I think that’s the biggest problem we’re all going to face. You need to take an enterprise approach, layered defenses. You have to encrypt your data. You have to worry about access control. You have to believe that they will break you. It makes sure that you can recover really fast, especially when it comes to critical systems.

write to Steven Rosenbush at steven.rosenbush@wsj.com