By Lauren Keyson and Sarah Grieco
An interview with Tom Eck, CTO of Industry Platforms at IBM:
Lauren Keyson: What is the premise behind Industry Platforms?
Tom Eck: A year or two ago we launched Watson Health, and now we’ve launched Watson Financial Services. The current focus of the Industry Platforms team is in financial services, which is “How do we serve today’s both enterprise and startup entities for building the next generation financial services application.”
As we know, those are more and more cloud-based and API driven. So a lot of what we’re focused on is offering access and functionality through discreet APIs using standards so that they’re very easy to integrate into your application. We’ve taken a very much a developer approach. This story is really about a one-stop shop for building financial services applications. So that means it’s a place where you come to build, deploy and buy and sell financial services-related assets.
Tightly coupled with this development/platform as a service where you run your applications is a marketplace. It’s a combination of IBM and third party access. So from the IBM side, it includes some of our “horizontal offerings” such as Blockchain, our Watson positive APIs, our data services as well as offerings from third parties. So, we launched with about 15 syntaxes.
LK: Could you give us the name of some of your partners and what you do with them?
TE: I’m going to hand you a great byline. It ranges from some early to mid-stage startups all the way to incumbent institutions that have been around for 60-70 years. The API economy doesn’t discriminate based on the size of the producer or consumer of the API. It’s pretty equal there. We knew that especially for the developer community (CTO’s etc.), we’ve all seen enough slides. Once we’ve all seen a slide deck, there are a few things we can think: First of all, et me check my phone. Secondly, I wonder how much of it is in vaporware; you know that kind of stuff. Actually to not just capture the attention but help solidify in the audience’s mind what is it the value proposition we’re delivering here? We decided to create a few applications to showcase the capabilities of the platform, really what is to build an application by composing these APIs and data that comes from IBM and these third parties.
LK: When do you code?
On the weekends, when I’m not watching English Premier League. If not doing something like that, I’d be coding. I’ve been a developer and coding for 25 years. I don’t get to do it a lot, but I purposely wanted to do this. I’ve only been with IBM for four months. Before coming to IBM, I was at First Data, the largest payment processer in the world who is a large IBM client. But that had nothing to do with me coming here.
LK: So why did you go there?
TE: The opportunity was tremendous — my role is coming up with ways we can monetize these great assets that we have at IBM. I believe we have some awesome capabilities, these jewels that I don’t think we adequately explain their value. I get to play with all the latest and greatest tools, from Blockchain to AI, and I do have a background in AI, to the IBM cloud. I could tap into IBM Research. I have the responsibility to figure out how do we assemble these things and maybe glue them together with something new so that we can now help our financial services clients address opportunities or challenges. What we announced last week we did in 3 months.
That was due to a few things. First of all, it’s due to the people here. That was one of the biggest surprises coming here. The people here are universally nice who are very talented and dedicated. The second thing is just the technology. The technology we launched already existed for years here, but in a different form. So, one of the examples is this product we have called Algorithmics from a company we bought years ago. It’s some of the best quantitative finance modeling software in the business. It lets you simulate things like “what if” scenarios. What if wanted to look at your investment profile and see what interest rates went up. That’s only been available as a monolithic application that takes many months to get the contract written, installed in the data center and it costs many dollars annually.
So it was only accessible to large institutions and hedge funds. We’ve democratized that now by exposing some of the capabilities through API’s. Now literally what could have taken the year can now take less than 5 minutes and is now accessible to a much wider audience who can now pay for the pieces that they want to use and pay on a per call type of plan. But we’re still going to sell the large product because it has many capabilities and more customizable abilities. Like a hedge fund may want to tune it.
I believe that when developers see what we have, they will want to leverage it. There’s a lot less friction in giving a developer access to an API rather than having to wait a year to have a proof of concept stood up in your corporate data center. You can sign up to Blumix.net for free for 30 days.
A developer can go there, create a free account, in two minutes they’re up and running and can start kicking the tires. I believe by eliminating all the upfront friction and letting the developer get right at seeing the API’s and testing them out for themselves; I think they’re going be hooked and see the value. They’re going to end up being a long-term customer who is going to be consuming more and more of these services. IBM gets paid and that developer, ISB or enterprise is obtaining a lot of value from it.
For example, we bought the Weather Company. We have a powerful set of API’s belonging to weather. Now, it’s access to weather data through APIs. And the way we monetize that is there’s a free tier that you can make up to 10 calls a day, or something like that. Then there’s the “bronze tier” where you can do 11 to 1,000, and it costs a little higher or something like that. But there are different tiers that can be specified. Third parties have the ability to do that as well. They can say you pay per call or have a monthly subscription. There’s flexibility in the way that we monetize.
Here’s a great application that’s part of an industry interested in weather: the insurance industry. You can think about a different hurricane forecast to a hail storm and the damage it does against cars. Hedge funds pay a lot of money for premium weather service. There is a big financial service component.
So, this Showcase App I built, I wanted to put a developer hat on, “Who comes to Bloomix who may have never seen it before, and what’s their experience going to be like”? I built a cognitive chatbot that’s SMS-based. It lets you ask questions about your stock portfolio. It does what you think. It goes “Hi Watson or Hi Tom.” It can recognize you from your phone number. I can ask questions like, “How’s my portfolio doing today?” That uses our Watson conversation, which is our conversational platform that lets you build chatbots and conversational interface. This is one of these great tools that does all the cognition around, “what is this human on the other end asking me to do?”
The user is asking for the price of his or her portfolio. What happens next, it uses one of the other API’s we launched, which is pretty advanced portfolio management instead of API’s. You can manage your financial portfolio by API. My app calls that API, now I know all the instruments in my portfolio. Now I use a third-party data provider called Xignite.com.
LK: Does your chatbot let you check stock prices? Does it have a name?
TE: No, it should have a name. I would just call it Cognitive Chatbot. After it figures out what goes into the portfolio, it calls out to an exit API that gives the market price. And then it uses one of the Algorithmic API’s I told you about before previously, a multi-million dollar application. Through the chatbot, I can say “What would happen to my portfolio if the S&P drops 5%?” That is a very complicated question and answer that needs a very sophisticated algorithm. Just by connecting the API into this little chatbot, you give the power of what institutions have.
Let me give you the punch line here: I teach a programming class; we call it the Technology Club at Christian Brothers Academy in Lincroft, NJ. My son is a student there. Every other Friday I go there, and I teach them basically how to code. I tell them about what the job is like, not just about the syntax, but what is it like to be a developer? Last Friday, five days after we launched, we spent that session (2.5 hours), and had them build a chatbot. It does a similar thing. You ask, what is the price of IBM? You can use Watson Conversation to figure out everything it’s asking for. You get the market price and then it returns it in SMS.
LK: How did you get into this? And how does someone with a tech degree go about getting a job like yours?
TE: Well, if they wanted a job at IBM, I would say, the internship program would be a great way. I also think what our chairman is doing is interesting. She’s looking at alternative forms of education. She calls them “new collar jobs.” And maybe changing the way we do education so that students come out more equipped to hit the ground running in their first job. I would say just like everything else, there are so many resources on the Internet and all you need is a laptop. Students need a laptop, Internet access, and sufficient motivation.
There are great assets online to learn to program. There is a plethora of sample code for students to look at and I hope there’s more and more programs like what I started at Christian Brothers. I started that club because I felt there was a need. The challenge is, my son would probably rather play games or social network than do programming. So I try to show them the potential if they focus on this. Like I told them, I spent a lot of time with Apple and Google and it’s awesome. But to get in there you have to start now. “Why don’t you give up half the time you’re playing games. I’m giving you everything you need to get started, including mentorship. You can teach yourself how to play guitar online, but you can’t replace having an instructor. You can supplement online.”
If you started on the Internet, how do they know what programming language matters? Start at least in high school if not earlier. Get them interested in programming. Give them some guidance and spark their creativity. The drive has to come from within. There is an extreme shortage of developers. I’m having a terrible time trying to find developers to come work with me in NYC.
LK: If you had one piece of advice for a web developer who is trying to create the next Uber or Airbnb, what would you tell them?
TE: The things that make a developer great are attention to detail, problem-solving skills and perseverance. If you don’t have those three things, this might not be the career for you.
