IBM Earns 9,100 Patents VP Jeff Welser
IBM Earns 9,100 Patents VP Jeff Welser

Can IBM Convert Latest Patent Blitz into Rising Revenue?

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While the IBM R&D teams received 9,100 patents in 2018 and for the 26th straight year led the world in that category, the company needs to begin showing customers, partners and investors that it is turning those laboratory innovations into high-value business solutions across AI, cloud and cybersecurity.

Taken in isolation, the latest evidence of IBM’s unquestioned leadership in creating breakthroughs in the lab are remarkable.

By the Numbers

IBM’s 2018 total of 9,100 patents equates to more than one patent per hour for the entire year (24 x 365 = 8,670).

For the second straight year, IBM said that almost half of those 9,000-plus patents in each year centered on cloud, AI and cybersecurity, as well as blockchain and quantum.

For 2018, more than 2,000 of IBM’s patents were in the field of cloud computing; more than 1,600 were in the field of AI; and more than 1,400 centered on cybersecurity and AI.

While IBM has not yet released its financial figures for 2018, CEO Ginni Rometty said almost a year ago in her annual letter to shareholders that R&D spending for 2017 reached $5.6 billion. That investment yielded 9,043 patents awarded to IBM in 2017.

In IBM’s Own Words

In a press release announcing the 2018 patent surge, Rometty said her company is committed to being at the forefront in creating “the technologies that change the way the world works” and in “solving problems many people have not even thought of yet.”

Now, that second comment from Rometty—the one about solving problems that businesspeople aren’t even aware of yet—can be taken in two ways, with the first being that IBM’s relentless leadership in patent awards sets it apart from its competitors in enterprise technology and gives it a decided edge in this incredibly fast-changing business.

But the second and less-charitable interpretation is that IBM might be better served by redirecting more of its resources toward the near-limitless set of business opportunities in the here and now, the pursuit of which is generating much higher growth rates for leading cloud and AI competitors such as Microsoft, Amazon, Salesforce, and SAP.

For while innovation and invention have been at the core of IBM’s culture, mission and performance since its founding more than 100 years ago, it is intriguing that IBM is the only major enterprise-tech player that trumpets its patent-generation prowess year after year.

On the other hand, it’s unmistakably clear that cloud and AI and cybersecurity represent the company’s future, and one of IBM’s R&D leaders said that many of the thousands of patents awarded during 2018 in those fields might be translatable into revenue within a year or so.

“In our cloud research and development, our teams work very closely with some clients and run tests with them as well as internally, and so for some of those projects the business opportunities might generally come within the next year or so,” said Jeff Welser, VP and lab director for IBM Research at its Almaden facility in a phone conversation late last week.

IBM VP Jeff Welser

IBM’s R&D work in the cloud has a big focus on “one of the biggest challenges almost all of our clients face, which is how to integrate cloud services and technologies into a full IT environment, which today is almost always hybrid,” Welser said.

Many of the 2,000 cloud patents IBM received last year involved containers, the movement of data across clouds and on-premises systems, and the best ways to deliver advanced and consistent cybersecurity across hybrid environments.

“And of course there’s also lots of concern these days about where data resides in the cloud versus on-premises, and with streaming, where you want to leverage the cloud’s ability to do that at scale but you also need to keep some of that on-premises—and a lot of our work can help clients decide which data to keep on-premises for security versus in the cloud for scalability.”

What Comes Next for IBM?

In AI, Welser said, the R&D teams are “focusing on the question of what it is that a person who’s using AI will really do with it” and deploying in ways that ensure that “systems are doing what they’re supposed to do and are really good at doing—such as scanning huge volumes of information—and letting humans do what they do well, which is evaluate the various pros and cons and the relevant ethical issues.”

And those advanced forays with AI are convincing IBM that it’s well on its way to becoming ubiquitous, Welser said.

“AI has really become so broad in its impact—it affects every part of our technology, from advanced analytics to IoT to cybersecurity and more—that more and more, everything we do is beginning to involve AI at its heart.

“And that’s why we have such a focus on this.”

 

Disclosure: At the time of this writing, IBM is a client of Evans Strategic Communications Inc.

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