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IBM chief talks change, and a little politics

Sam Palmisano says we can fix stuff - with IT, of course

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IT executives are a funny group. They are usually like broken Magic 8 balls. Whenever you shake them up - perhaps with a financial crisis or a new political reality - they always say the same thing: more IT will fix our problems. But every now and then when you shake the ball, you get a slightly different set of answers than you expected.

That's what happened last Thursday when IBM's chairman and chief executive, Sam Palmisano, gave a speech at the Council on Foreign Relations in New York, only two days after the presidential election in the United States. Change was - and still is - in the air, and that was one of the themes of Palmisano's speech. You can see the draft of the speech, which Palmisano more or less stuck to, at this link, and you can watch the video of the speech here.

The more interesting bit of the event hosted by the Council was when Palmisano sat down with Robert Rubin, the former Treasury Secretary and co-chairman of Citigroup, for a Q&A session. While Palmisano is not known for being a great orator - which is why we so rarely see him speaking - he is a lot more comfortable sitting down and taking questions. Perhaps because this was not, strictly speaking, an IT setting, Palmisano was pretty frank in his comments about the problems the world faces and how we might start solving them. If you know anything at all about IBM, you understand how unusual this is. There's a joke in PR circles that the easiest job in the world is being the press relations person for IBM's chairman and CEO. He only speaks four times a year, and that is a canned statement in a press release, and once at the annual financial analyst summit. Other than that, excepting many meetings off the record with business and political leaders around the world, the Biggest Bluer says nadda.

In his opening remarks to the Council, Palmisano set the very familiar stage we have been watching for months. "It is an extraordinary moment in time, with a major political transformation in the United States, economic turmoil, financial markets restructuring themselves. Certainly there is a little going on," he said with a little sarcasm.

"But there is also, I think you will agree, an acute feeling for a need for leadership. I think political leaders are not the only ones who have been handed the mandate for change. Leaders of businesses and institutions everywhere confront the unique opportunity to transform the world that we live in," Palmisano said, for reasons we may not like. "But this is only one in a series of events in the first decade of the 21st century, and I think it has been a series of wake-up calls in the world." A world, he explained, that is globally integrated, and in a way that means more than just the movement of data and capital across national boundaries.

The world, at least metaphorically, has become flat, but Palmisano argues that it is also becoming smarter. Sensors are being put into supply chain, healthcare systems, across cities and in natural systems. Soon there will be two billion people on the internet, which can be used to link all the instrumented aspects of the physical world and applications and their systems together. If you don't like SkyNet, then you won't like Palmisano's third assertion much, which is that devices connected to the internet and private networks are getting smarter - turning mountains of "data" into something Palmisano called "intelligence". And it is this intelligence that Palmisano wants to bring to bear on the healthcare, energy, distribution, transportation, and financial markets.

Speaking of the meltdown, this is what IBM's chairman had to say about the cause of the financial crisis, and it is exactly the kind of answer you would expect from an IT vendor: "There will be many books written about this. But I think that there is one thing that we would all agree with at this point in time, and that is that the financial institutions understood how to spread risk, but they were not able to track risk. And that lack of certainty - that lack of knowing, lack of precision - underminded confidence."

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