Investing in advanced technology to stay near the top of the savagely competitive enterprise-cloud market, IBM earned more than 1,900 cloud-technology patents in 2017 and has just released an AI-optimized chip said to have 10 times more IO and bandwidth than its nearest rival.

IBM is coming off a year in which it stunned many observers by establishing itself as one of the world's top three enterprise-cloud providers—along with Microsoft and Amazon—by generating almost $16 billion in cloud revenue for the trailing 12 months ended Oct. 31, 2017.

While that $16-billion cloud figure pretty much matched the cloud-revenue figures for Microsoft and Amazon, many analysts and most media observers continue—for reasons I cannot fathom—to fail to acknowledge IBM's stature as a broad-based enterprise-cloud powerhouse whose software capabilities position the company superbly for the next wave of cloud growth in hybrid cloud, PaaS, and SaaS.

And IBM, which announces its Q4 and annual earnings results on Thursday, Jan. 18, is displaying its full commitment to remaining among the top ranks of cloud vendors by earning almost 2,000 patents for cloud technologies in 2017, part of a companywide total of 9,043 patents received last year.

Noting that almost half of those 9,043 patents came from "pioneering advancements in AI, cloud computing, cybersecurity, blockchain and quantum computing," IBM CEO Ginni Rometty said this latest round of advanced-technology innovation is "aimed at helping our clients create smarter businesses."

In those cloud-related areas, IBM said its new patents include the following:

1,400 AI patents, including one for an AI system that analyzes and can mirror a user's speech patterns to make it easier for humans and AI to understand one another.

1,200 cybersecurity patents, "including one for technology that enables AI systems to turn the table on hackers by baiting them into email exchanges and websites that expend their resources and frustrate their attacks."

In machine learning, a system for autonomous vehicles that transfers control of the vehicle to humans "as needed, such as in an emergency."

In blockchain, a method for reducing the number of steps needed to settle transactions among multiple business parties, "even those that are not trusted and might otherwise require a third-party clearinghouse to execute."

For IBM, the pursuit of new cloud technologies is particularly important because a huge portion of its approximately $16 billion in cloud revenue comes from outside the standard cloud-revenue stream of IaaS, PaaS and SaaS and instead is generated by what I call IBM's "cloud-conversion" business—an approach unique to IBM.

While IBM rather aridly defines that business as "hardware, software and services to enable IBM clients to implement comprehensive cloud solutions," the concept comes alive when viewed through the perspective of what those offerings mean to big corporate customers. To understand how four big companies are tapping into IBM's cloud conversion business, please check out my recent article called Inside IBM's $7-Billion Cloud-Solutions Business: 4 Great Digital-Transformation Stories.

IBM's most-recent batch of cloud-technology patents—and IBM has now received more patents per year than any other U.S. company for 25 straight years—includes a patent that an IBM blog post describes this way: "a system that monitors data sources including weather reports, social networks, newsfeeds and network statistics to determine the best uses of cloud resources to meet demand. It’s one of the numerous examples of using unstructured data can help organizations work more efficiently."

That broad-based approach to researching and developing advanced technology also led to the launch last month of a microchip that IBM says is specifically optimized for artificial-intelligence workloads.

A TechCrunch article about IBM's new Power9 chip said it will be used not only in the IBM Cloud but also the Google Cloud: "The company intends to sell the chips to third-party manufacturers and to cloud vendors including Google. Meanwhile, it’s releasing a new computer powered by the Power9 chip, the AC922 and it intends to offer the chips in a service on the IBM cloud."

How does the new IBM chip stack up? The TechCrunch article offered this breathless endorsement of the Power9's performance from analyst Patrick Moorhead of Moor Insights & Strategy: “Power9 is a chip which has a new systems architecture that is optimized for accelerators used in machine learning. Intel makes Xeon CPUs and Nervana accelerators and NVIDIA makes Tesla accelerators. IBM’s Power9 is literally the Swiss Army knife of ML acceleration as it supports an astronomical amount of IO and bandwidth, 10X of anything that’s out there today.”

It's shaping up to be a very interesting year from IBM in the cloud, and I'll be reporting later this week on Thursday's earnings release.

By: DocMemory
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