How IBM is adapting its offerings to build partnerships

IBM is a vast and complex business, but it’s currently divided into two large divisions: consulting and software. As AI creates a need for technical expertise, the company has experimented with combining teams.

That’s where Andy Baldwin, SVP offerings and growth at IBM Consulting, comes in. He’s in charge of leading growth experiments and also plays a role in crafting IBM’s partnership ecosystem that creates a mix of internal and external software offerings for customers.

This interview has been edited for clarity and length.

How is IBM thinking about growth in the AI era?

We’re recognizing that the buyer behavior is changing in those clients, and we need to be reflecting and adapting to that. I think the CIO, CTO is still incredibly important for technology-centric consulting firms, but actually the other buyers are becoming more important—or as important in certain areas.

Our hybrid cloud data and AI business, that’s where I’m expecting to see a lot of the growth…We booked $7 billion last year. Our book of business is probably worth about $12 billion of generative AI. Interestingly, that book is about 45% Watson IBM products; 55% is actually our ecosystem partners.

Instead of selling to those technical heads you’re now selling to the CFOs of the world, the HR heads of the world. How do you build strategy around understanding that shift?

One of the things we did, which is probably unusual, is we’ve basically taken a number of our functional leaders out of procurement, finance, marketing, HR…and we’re putting them into the consulting business. We’re actually having them work alongside the consultants who are maybe more classically trained consultants, but you’re going in with someone with an incredibly deep subject matter expertise around driving AI in the forecasting, finance close process, because that’s what they've been doing for the last 15 years in IBM.

Earlier you mentioned that IBM is having success with its partnership ecosystem, how do you execute those partnerships?

We have about 450 ecosystem partners as IBM Consulting, of which, in fairness, probably 12 of them, including IBM tech, account for about 90% of the value, because that’s where the clients are either invested or they are investing today.

If there’s a marketplace for that alliance partner, we’ll typically build the assets on their marketplace. Those with [Oracle Cloud Infrastructure], we’ll build our industry or business value assets onto their platforms directly so that they’ll be available for consumption off the marketplace.

Can you tell me what asset-based consulting looks like in motion?

It’s really the combination of human and the digital asset. That is the first thing to be clear on because I think that balance shifts and changes in line with the different types of consulting archetypes.

When thinking about growth, how do you think about what quantum computing can do for IBM as a business?

We’ll do a couple $100 million of sales on quantum safe, in the encryption side of it. So I think people are starting to be concerned about that, but the broader piece is we’ve always talked about 2028 onward for the real commercialization of it.