The Transcripts, Transcripts

International Business Machines Corp (IBM) 51st Annual JPMorgan Global Technology, Media and Communications Conference Call Transcript

International Business Machines Corp (NYSE:IBM) 51st Annual JPMorgan Global Technology, Media and Communications Conference Call May 23, 2023 11:30 AM ET

Company Participants

John Granger – SVP, IBM Consulting

Conference Call Participants

Brian Essex – JPMorgan Chase & Co.

Brian Essex

All right, there we go. Okay. Good morning, everyone. Thank you for joining us. My name is Brian Essex. I’m a software analyst at JPMorgan. And with me today, I have John Granger, Senior Vice President of IBM Consulting. So he runs that group. And John, thank you for joining me.

Maybe a good place to start is introduce yourself. And you’ve had a lengthy career with IBM and you’re currently leading IBM Consulting. Can you share a bit about your background and the business that you’re running today?

John Granger

Yes. Look, I mean, very quickly, I actually came into IBM through IBM’s acquisition of PwC Consulting in 2002. I was a partner in PwC. And so actually, like many of the leadership per today of IBM Consulting, we still retained quite a lot of that PwC backbone. But I’ve worked in — I’ve run the business for the U.K. I’ve worked — I’ve run IBM Consulting in Europe, I lived in Madrid for a bit. I went and ran our application business for a couple of years in Bangalore, worked in the U.S. And now I’m back based in the U.K.

I mean, just to talk a little bit about our business, Brian, I mean, just — and we’re going to come on to talk a lot more about it, I’m sure. But about 160,000 people, I mean, we’re about — now after the spin-off of Kyndryl, the infrastructure services business, we’re about 1/3 of IBM’s revenue, but perhaps interestingly, 2/3 of IBM’s people. So if you talk about an IBMer, then it’s likely as not, you’re talking about somebody in IBM Consulting.

Question-and-Answer Session

QBrian Essex

Excellent. Thank you for that. And there have been quite a few changes recently, particularly under Arvind’s leadership. How would you describe the difference that you’ve seen in management and the way the company is run with the strategic direction now that you have someone that’s a career technologist leading the company?

John Granger

Look, I mean, I think — I mean, all of our CEOs have different strengths. I’ve worked with Sam, I’ve worked with Ginni, I work for Arvind. But I mean, I think Arvind’s strategy, if you had to sum it up in a sentence, is for IBM to deliver transformation powered by the preeminent technologies of our time, hybrid cloud and AI, leveraging the ecosystem. And so if you ask me the difference that he’s made, then I think I’d probably point to three things.

I mean, the first is that with the sell-off of — or the spin-off of Kyndryl and with that strategy as it were, he has simplified our company very significantly. And so in the way that we are now organized and run ourselves, then I’m accountable on the Consulting side for predominantly leading the transformation. My technology colleagues drive the products and technologies that support hybrid cloud and AI. And then we all contribute around the leverage of the ecosystem. So I think, first of all, it’s a much simplified company.

I think the second thing I would say, Brian, is that, look, I mean, I talked to you about that strategy in a sentence, powered by the preeminent technologies of our time, hybrid cloud and AI. Arvind laid that out 3 years ago. So particularly — I mean, I think that, that shows that he has absolutely positioned us in, I think, what you, Americans, call the right neighborhoods. I mean, in terms of hybrid cloud, it’s been a really important focus for enterprise clients. And clearly, with generative AI now coming to the fore, it’s great that we’ve been in this space now for some time.

And then the third thing that I think he’s done, which is perhaps a difference in emphasis from previous administrations as it were, is Arvind is very committed to, as I said, leveraging the ecosystem. So Arvind is passionate about no one company can hope to provide — to have a monopoly on all the technology solutions that a client needs. And therefore, what you’ve got to do is to ensure that you can orchestrate and integrate those solutions to provide value to clients. And so he’s really encouraged that culture at IBM to ensure that we’re making that ecosystem work for us. And I think it’s fair to say that in IBM Consulting, we’ve led the way in that.

I mean, we announced in Q4, I think, I mean, we’ve now grown our AWS business to over $1 billion. We’ve grown our Azure business to over $1 billion. We’ve always had a big SAP business. We’ve got other partnerships with Salesforce and Adobe that are coming through strongly as well. So I think that’s been really important. So the three things I’d highlight then, the simplification of the company, the positioning of ourselves in the hybrid cloud and AI spaces and then how we’re now encouraged to really leverage the ecosystem, which I think has been very beneficial for our clients but also for IBM.

Brian Essex

Excellent. And how has some of the actions that IBM has taken to reposition in the Consulting business help you serve clients differently than the way that you were positioned before?

John Granger

Well, I think the first thing that we’ve done is we’ve got real clarity about what our offerings are, what we call our growth platform. So we’re really clear around three growth platforms. The one is the journey to cloud, application migration, application modernization, the management of cloud in a hybrid cloud environment.

A second growth platform is really around intelligent workflows, Brian, which is that’s where all of our capability lies in terms of our process expertise, talent, finance, supply chain, customer care and so on and so forth, but — and our BPO business as well as our whole data and AI capability. And then thirdly, we have a security growth platform. So those are the three areas that we’re focused in.

And then in terms of how we’ve repositioned IBM Consulting, I think that’s really — we have a very intentional framework that we call transform to grow, which is about ensuring that we double down, if you will, on the few things that will really make a difference, i.e., focus more and more on less and less. So the first of those has been talent. So in the last couple of years, we’ve grown our business now to 160,000.

And that’s not just a big influx of practitioners. That’s also been a strong influx of building up of go-to-market senior talent. We’ve — and it’s not just been about the quantum of talent, it’s also been about the quality. I mean, a lot of certifications that we’ve now driven, particularly with our partners, 66,000 cloud service provider certifications, over 50,000 ISV certifications.

Second thing that we’ve worked on beyond talent has been brand. So previously, before the spin-off of Kyndryl, we were Global Business Services. Well, when you were trying to recruit kids or — you put Accenture, Deloitte alongside Global Business Services, it’s hard to work out what we do. Now we’re IBM Consulting, the choice is very clear. And I think that’s enabled us to not only be successful in recruiting talent but also to ensure that we’ve really reintroduced ourselves to our clients. So I think that brand is something that we’ve stayed on.

A third piece is being client segmentation. As is the way with all good consulting organizations, we’ve been trying to cut the tail to ensure that we go deeper and deeper with the clients that we do have. So we’re very focused on a very curated set of top accounts. Fourth thing would be big transformational deals. I mean, I think there’s a lot of those in the marketplace. And we’ve maybe not had our fair share of those historically. So I think you’ve seen in our signings that we’ve started to pick up much more of those big technology-driven transformation deals.

And then the last two things would be partnerships. So we talked about the ecosystem. I said that we’ve led the way on that. I think our partnership revenue is now approaching 40%. We — as I said, we’ve built these very big businesses with AWS and Azure, so really made a very deliberate pivot to how we work with partners in the market. And the last one then is acquisitions. And in particular, we’ve done 14 acquisitions in the last couple of years, which is a lot more than in the last 14 years.

And many of those acquisitions have been very specifically geared towards underpinning those strategic partnerships. So we bought Nordcloud, for example, in Europe that brought a lot of competencies in AWS. And in Azure, we bought Neudesic, which is the last Microsoft shop standing in — or sizable Microsoft shop standing in North America. And we bought Taos and so on. So we’ve really deliberately focused these acquisitions on reinforcing those partnerships.

So talent, brand, client segmentation, big transformational deals, acquisitions, strategic partnerships, just those six things, stayed laser-focused on those. And that, I think, has been pretty good for us. I mean, we’ve had 8 quarters now of consecutive growth. So, so far, that framework seems to be paying off.

Brian Essex

Great. And then IBM has stated that demand for technology transformation has been and remains pretty robust. What are you hearing from clients on that front in terms of what’s driving their demand?

John Granger

Well, so I think, as I said earlier about our focus on these big transformational deals, I mean, I think it’s very clear that in the marketplace, there is a lot of demand at the moment for technology-driven transformational deals. And you can see that in our signings. We had a very strong Q4. And we had a strong first quarter actually, where normally we drop off a fair bit. We didn’t drop anywhere near as much. You see it in our competitor signing.

So I think it’s clear that, that technology-driven transformation, whereas in previous times of economic uncertainty, you might have said that, that was discretionary and you’d see that fall away, we’re not seeing that happening now. And you ask about where that comes from. I think that’s, I mean, maybe four drivers, a couple of which are still pandemic-related. I mean, I think the whole digital transformation in terms of virtualization of organizations’ and enterprises’ relationships with their clients, with their customers, that still has to work its way through.

So there’s a lot of transformation around that. A lot of work still to do on supply chains. We all experience that every day. The supply chain transformation work has still got a lot to do. But I think the one that came as a result and as a consequence of the pandemic and some of the wage inflation that followed, that is productivity and the whole AI piece. Because clients have clearly felt that the price of some of the skills that they need to get is prohibitive, so how that, I think, has pushed them to think more about productivity. And then of course, you’ve got cybersecurity.

So those are the drivers. For us, we see the market, I guess, it’s probably about — I mean, we think about $800 billion for consulting services growing mid-single digits for the foreseeable future. And about half of that is in the cloud and intelligent workflow space. So to play back to what I talked about earlier in terms of our growth platforms, we had cloud and intelligent workflows as our growth platform. So we think we’re pretty well adjusted for that.

The one area, I guess, in all of this demand though that we and others have called out is North America, the U.S. And I think there’s a different market dynamic going on there. So it’s a paradox in the sense that the appetite for the big transformational, technology-driven deals that I’ve said — I mean, that’s still there. And we’re seeing that in the U.S. market. But I think there’s more pressure on fundamentals that everybody is feeling.

And so I would say that clients in North America have much less contingency. They — if there is work that is not part of this mainstream technology-driven transformation, then they’re more inclined to delay it. For some of the staff augmentation work and some of the enhancements that sort of sit around some of the bigger deals, a bit like pilot fish around a big whale, those things are sort of being held off.

And so whilst I would say that there’s no evidence of any cancellation of work, we’ve seen no backlog reduction, there is a sense of some of the more discretionary work shifting a bit to the right and the pace of it slowing down. So I mean, we’ll continue to work through that. But I mean, that’s the sort of picture, a common drive for large technology-driven transformations but a bit more softness in the U.S. market around some of that discretionary work.

Brian Essex

Is your visibility there better because perhaps customers experienced some of the benefits of transformation during the pandemic that kind of forced their hand and now they want to move faster with you on the transformation?

John Granger

Yes, I think that’s — I mean, that’s indeed how it’s happened. I think that — I mean, the reason this demand is held up is because clients are now seeing it’s a fundamental source of competitive advantage. I mean, it’s not something that they can afford to put to one side.

Brian Essex

Great. And then how would we think about the way that IBM differentiates its Consulting business in the market? And how much is the success of the software business tied to Consulting?

John Granger

So I mean, in terms of — I mean, as you all know, I mean, the consulting system integration market is really crowded. So to say that there’s sort of one magic bullet of differentiation is quite hard to achieve. And so I mean, we think about differentiation in sort of three groups really. The one is being differentiated as part — by being part of IBM. And when I first came into IBM, I wouldn’t have pulled that out. But I think now, I mean, that’s really important.

And the way it is most important, I think, is if you want to do really big, complicated end-to-end transformation possibly with a global footprint, there are really only two players in our marketplace that you would think about, which is Accenture and ourselves. So whether that’s the big cloud modernization and migration that we’re doing for Delta or whether it’s the global SAP implementations that we’re doing, in that category of work, Brian, it’s really only us and Accenture.

And being part of IBM really helps us in that context because of, I mean, not only IBM’s brand but also the financial firepower that IBM has, but also the technology depth that IBM has. That’s really why clients are looking to choose us in that space. But elsewhere, I think, to your point, we also benefit by being part of IBM to be able to use and to leverage IBM’s technology.

So the best example of that is Red Hat, where we’ve built up a business that is now over $2 billion in terms of revenue. So that’s just about 10% of our business overall. And we’ve had $8 billion of signings in Red Hat since the acquisition. So that’s an area where we’ve leveraged IBM’s technology to our advantage. And we’ve got 15 other practices, ranging from Maximo, TRIRIGA, mainframe modernization and so on. So I think that being part of IBM is an important differentiation.

Second part of our differentiation, particularly against some of the other players in the marketplace, is our industry expertise. So we have deep industry expertise. And that’s recognized as such across the piece. And that, along with our understanding of clients, enterprise clients, particularly where we’ve been doing application management for them for many years, means that we have a really good understanding of what their businesses are.

But the last piece and the piece of differentiation that I think is probably the closest that we have to unique differentiation is how our clients experience us. So we have an approach to our work called Garage, which is where we bring clients together in either a virtual or a physical environment with some of our technology, and we actually co-create minimum viable products and then co-execute those, scale them up really quickly. And so we did nearly 7,000 of those last year. They have a very high NPS score.

And we had some independent research done by Forrester actually that said that these — this approach drives 10% more innovative ideas, gets you to market 70% quicker and bring 6x more of those projects into production than otherwise. So I think that experience, how you experience working with us is a really important part of that. So being part of IBM, our industry expertise and how we understand clients and then Garage and how you experience us, that’s what we think about in terms of our differentiation.

Brian Essex

Great. Super helpful. And maybe a conversation with IBM couldn’t be complete without mentioning AI.

John Granger


Brian Essex

So maybe we’ll shift over to AI and generative AI. Beginning with a broader view of AI first, how are you helping clients leverage artificial intelligence today?

John Granger

So I do want to split this into two really, and maybe we come back to generative AI. Because I think it’s important to recognize that, as I said earlier, Arvind called AI as a critical area 3 years ago. And so that’s really because we see for clients, this is absolutely essential to their competitive advantage. I mean, being able to do more for less, how you’re able to drive that innovation, productivity, scale, that’s really important as well as the size of the market.

I mean, even before generative AI, analysts like IDC were saying this is going to be $35 billion growing to $65 billion. So it’s a really big marketplace. It’s really important. And we’ve had a big capability here for a long time. So we’ve got 21,000 of our 160,000-odd consultants are in that data and AI space. We’ve done 40,000-odd engagements.

And really, I think our focus has been around four areas. One is customer care. So a good example would be the Veterans Administration, where they’re claims processing. So how do you speed that up? How do you ensure that they can analyze and ingest all those documents really quickly and come to a decision much faster? And so we help them with some — actually some IBM technology but running on AWS that’s now got a 93% extraction accuracy and has really brought that whole decision-making process down from 20 days to 1. That’s a really good customer care example.

If you looked at process operations, then TD Ameritrade, 15 processes around how their customers make margin trades or inquire about their accounts. And so we’ve really been able to use a lot of AI assets to reduce the time for processing really quickly there.

In IT operations, J.B. Hunt, a transportation player, we’ve used automation assets to help them manage their multi-cloud environment. And then sports tournaments, Wimbledon is coming up, they take over 200 million security events over the course of a tournament. And we would help them with that. So I think we’ve been in this space for a while. And so we’ve got a deep understanding of how clients will use that. Then of course, we’ve got generative AI that I think is going to tip the scale of how they’re going to use it.

Brian Essex

Yes. And maybe getting on to that point in terms of generative AI, several weeks ago, IBM launched watsonx to assist enterprises with leveraging generative AI in a safe, secure and private manner. Could you give us an overview of watsonx and what that means for not just IBM Consulting but IBM overall?

John Granger

Yes. Look, I mean, what watsonx is, is it’s an enterprise-ready tool set that uses trusted data in order to accelerate the building and deployment of machine learning and foundation models. And it comes in sort of three segments, if you will.

There’s, which is the tool set and the studio. There’s, which think of it as a lake house that actually enables you to access not only trusted data but also to throw a fabric over the rest of your enterprise data. And then there’s watsonx.governance, which is the protocols about how you bring all this together.

What I think is interesting about it, Brian, is that as I think about today’s IBM, so I’m talking about big IBM now, not just IBM Consulting, I would say the differentiation is open, deep technology and I think where, I think, we have a brand that is recognized for taking a very principal stance to the introduction of new technology. And I think you can see all of those elements coming through in what we’re bringing forward in this watsonx suite.

So in regard to the first of those, I mean, this is going to be one set of tooling that you can use anywhere, on-prem, on anyone’s cloud, that will actually enable you to run anywhere to build those models and to drive that data. And so we are very strongly of the view that this has to be multi-model on multi-cloud, and that a platform that we’re offering here is only as strong as the ecosystem that it enables.

So Hugging Face, for example, are going to be a big part of this. We’ll bring other partners into it. So I think this Watson suite — this watsonx suite is clearly open. In terms of technology, we’re really shifting now from large language models to the really deep foundation models. And we’re bringing into this capability, the first of those foundation models or that family are going to be around geospatial IT events and chemistry.

And then thirdly, around integrity, you’ve got to have trust embedded in all of these systems. So we’re bringing in protocols around how you explain how the data has worked, how you can be confident about the integrity and so on. So I think that’s very exciting for IBM.

In terms of how we’re going to exploit it in IBM Consulting, well, we’ve announced a 1,000-person CoE. We’re going to build a watsonx business. And we’re going to do that in the same way that I talked about Red Hat. So in the same way that we built a Red Hat business, we’re going to build a watsonx business within IBM Consulting.

The critical thing that I would want to say here, however, is that when we built the Red Hat business, at the same time as we built that $2 billion Red Hat business, we also built this $1 billion AWS business. We also built this $1 billion Microsoft Azure business. So this is not going to be a student body left in total focus on watsonx. We will drive the watsonx business at the same time as we in IBM Consulting take advantage of the other technologies that partners may bring to the market.

Brian Essex

Great. And I think you touched on this a little bit, but I want to kind of emphasize that one of the things we look at in the software space is platform versus product. So I thought your platform approach to Watson was really interesting — or watsonx was really interesting.

So I guess, on that, what’s your perspective of the importance of building a platform more focused on foundation models with cleaner data rather than a large master LLM model with greater volumes of data? Perhaps I don’t know if your customers are addressing some of the shortfalls around — I know there’s a governance segment of the watsonx…

John Granger

Yes. Look, I mean, I think — I mean, so the choice here at the moment is between models that have trillions of — or 1 trillion data elements that are less curated than models that — foundation models that — and I think this is where IBM is placing its emphasis, that may only have 100 billion of data elements but which are much more curated. And I think what’s critical here for business is confidence around the quality of the data, the amount of bias and so on and so forth.

And that is — I mean, that is the fundamental issue, I think. And we in IBM have always been super focused on enterprise. And so what I would say is that at the moment, to your point about what clients are seeing, I’d say, at the moment, clients are experimenting with both types, the broader models and the more narrow.

They’re only experimenting with the broader models where they’re really confident that their data is going to be protected. But they are — they are experimenting with both. But what we see at the moment though is that they — when they are starting to think about how they might go into production and scale, then they’re shifting much more towards the narrower foundation model.

And I’ll give you an example. I mean, where it is more complex for an enterprise, they need to rely more on these narrow foundation models. So think of three or four use cases. So where you’re going to use AI to support employee productivity, for example, you want to put somebody alongside an HR professional. That’s going to be a more — a deeper foundation model.

Where you want to create a new experience, like we did at the Masters, where we generated AI commentary for all of those golf shots, that sort of new experience, you’re going to want a more narrow, focused, curated foundation model. Where you as a legal business, for example, might want to not only change how your own organization operates but disrupt the industry, you’re going to want a narrower foundation model.

Where you’re in code creation perhaps, then a broader model may be more appropriate. But I think enterprise focus is going to be more on those narrower foundation models. That’s what we’re seeing. That’s where IBM is putting its emphasis. So we’re putting our emphasis there not only because of our focus on value and our focus on value for enterprise but also for innovation.

Because when you look at what the open source community is doing and where all the innovation is at the moment, it’s at the moment on those narrower foundation models. So we’re into that space because of where we think enterprise is going to go but also because where we think the innovation is going to come from.

Brian Essex

Excellent. So I guess, next, IBM built a strategy around, as you mentioned, hybrid cloud and AI. And we just spent some time on AI. So maybe to pivot to hybrid cloud, what are some of the main challenges clients are facing as they evaluate moving applications and processes to the cloud? And how is IBM supporting clients’ cloud strategies?

John Granger

Look, I mean, I think in cloud, our experience — and if you think about how you would characterize IBM’s clients, our enterprise clients, you’d say that what actually holds them together is the fact that they all drive mission-critical operations. So whether that’s in financial services, telco, government, health care, that’s the characteristic, I would say, that our client base has in common.

And what we have found with those enterprise clients is that for them, a simple hop to the public cloud is just not an option for reasons of data security, for reasons of the complexity of the large application engines that they run, the cost of actually starting to split those out and to move them over, let alone the Frankenstein’s monster of starting to see different skill groups and tribes building up within your operating model serving different clouds.

For all of those reasons, we see those clients thinking that a hybrid cloud architecture, and by that, I mean a single fabric that sort of runs across an on-prem environment, private cloud and multiple public clouds, that is the architecture that our clients are increasingly focused on. And we in IBM think that we’re really well placed to serve that because we have that architecture in the Red Hat stack.

I mean, that combination of Kubernetes and Linux and containers that Red Hat offers, that can provide that hybrid cloud architecture and fabric that allows you to build your applications once, deploy them anywhere, to skill your people once in that fabric and then use them anywhere and most importantly perhaps, to innovate anywhere with anyone’s technology.

And so that’s what IBM is focused on in this space. And what we in IBM Consulting are focused on is actually helping clients to take advantage of cloud in that sense. So a really good example would be Delta, where we are migrating and modernizing their applications to move to an AWS cloud platform. It actually uses Red Hat OpenShift on AWS, ROSA but domain-by-domain moving those applications to the cloud.

But as importantly, Brian, not just the technical part of it but also reskilling and reschooling their IT operations team into how they will work in agile squads going forward and how they will now work in a new cloud environment. And I could give loads more examples, but that’s the sort of thing that we do within the cloud space.

Brian Essex

Right. Excellent. And then maybe just a macro-related question, given the changing macro environment and the demand environment that you cited, from a productivity perspective, what is IBM doing to drive better productivity within the Consulting business?

John Granger

So I mean, I guess, there’s a couple of things in there. I mean, the one is what we’re doing to improve our margins, frankly. So I mean, I’d cite three things there. The one is price. So we’re doing — we’ve done a lot of work to ensure that we’re taking advantage of all of the cost of living and other provisions within our existing contracts but also leveraging the, what I call, the balance between the value that we create for our clients and the reward that we get.

We run a lot of Net Promoter Score surveys and really, therefore, saying, what is the — if we’re getting a high Net Promoter Score and you’re really valuing what we’re doing, but the reward is not what it’s like, how are we going to balance that out? And those conversations, I think, have been very productive for us in the last 18 months. So we’re doing a lot on pricing.

From a labor point of view, in a consulting business, it’s really about ensuring that you’ve got a really strong pyramid, that you’ve got — because most of your money is made by utilizing your more junior people for as much time as you can. So we’ve been working to ensure that our pyramids are in line. And then thirdly, just the heavy lifting around utilization.

And then the last thing I’d say is that we’re very focused on how we deliver to our price cases, which is how we make sure that the quality of the work that we do actually and the price case that we set out with actually gets delivered with our clients. So those are the things that we do from a margin point of view.

And then in terms of how we, if you will — is it cobbler’s children, I can’t remember, but how we actually apply AI to ourselves, then we’re doing quite a lot of that, particularly in the HR space, where, for example, we run our whole promotion process largely through Watson Orchestrate, which means that all of the data, all of the preparation work is automated. And it’s really only the final decision as to whether it’s remote or not that stays with the manager.

So that’s been very helpful. But also retention tool that has 95% accuracy because, I mean, we’re a people business, so looking at people’s skills, where they’re sitting, what’s happened to them recently and so on and then to be able to decide whether we want to intervene to keep them or not. So those are the sorts of productivity tools that we’re using to ensure that we’re always as efficient as we can make ourselves.

Brian Essex

Got it. Maybe just shift real quick to M&A, I mean, Arvind has mentioned the significant amount of firepower that IBM has. I think they cited — the management team cited kind of a 2/3 software, 1/3 services target model for M&A. What do you think the most likely target profile would be of companies that you might acquire?

John Granger

So in terms of target profile, I mean, to go back to what we talked about earlier and those growth platforms, so I think the first thing is are they capabilities that are going to fall into those growth platforms? So cloud, intelligent workflow, security, will they help us with — particularly with our strategic partnerships?

And then also, you put — across that, you put a market lens. So for example, we’ve identified federal as a market that we want to invest in. And we recently bought Octo, which is a technology and services company in federal, which really helped to build our capability there. So that’s how we look at it from a consulting point of view.

Across all of our acquisitions in IBM, there are really three questions. I mean, does it fit with strategy? Is it going to generate synergy across all of IBM? So whether this is a technology acquisition or a consulting acquisition, we expect it to reinforce either side. And then is it going to be cash-accretive in a reasonable amount of time? And so that is how we’ve thought through that.

Brian Essex

Great. Maybe last question for you, maybe just to wrap it up, what are you the most focused on that is key to the continued success of IBM Consulting?

John Granger

Well, so I think in terms of what we’ve talked about earlier, come as no surprise to say ecosystem and maintaining this open approach and therefore ensuring that we can leverage partnerships. I think taking advantage of technology disruption in the market, of which the present cause célèbre is generative AI. I mean, we’ve got a carry on executing.

But the last thing, I think it’s really important to remember in a consulting business, it’s all about people. And so one of the things that we are trying to stay very focused on is engagement. Because hanging on to your talent is really, really important if you’re going to progress as a business.

Brian Essex

Right. Excellent. With that, I think we’re out of time. So John, thank you very much for joining us.

John Granger

Thanks, Brian. Appreciate it.

Brian Essex

And thank you, everyone, in the audience as well.