International Business Machines Corp at Bank of America Global Technology Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Wamsi Mohan - BofA Global Research - Analyst : Well, look, I mean, there's been a lot of news at IBM and it's been an exciting time, I was wondering to start off maybe a little bit if you could share about your own career and your journey leading up to this role at Red Hat?

Question: Wamsi Mohan - BofA Global Research - Analyst : Well, excellent. Well, we're glad to have you with all the experience that you are in. And then I imagine investors are familiar kind of at a high level with Red Hat Enterprise Linux. But can you spend a minute maybe talking about some of the other key offerings that round up Red Hat?

Question: Wamsi Mohan - BofA Global Research - Analyst : Yeah, it's kind of crazy that Red Hat has only been five years since the acquisition. I would love to hear like what surprised you about the Red Hat acquisition or what has been some of the outcomes at IBM that you've seen that are surprising?

Question: Wamsi Mohan - BofA Global Research - Analyst : Okay. Right. That's really good perspective. There's lots to talk about AI because you guys have made some recent announcements, but there's also another element that I think a lot of investors are struggling a little bit how to think about this is the macro environment around enterprise software and would love to just get your perspective on what is happening more broadly across enterprise software where multiples have been derating and it's just been a tough environment in general? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JUNE 04, 2024 / NTS, IBM.N - International Business Machines Corp at Bank of America Global Technology Conference

Question: Wamsi Mohan - BofA Global Research - Analyst : Okay. No, that's a very interesting perspective. Thank you for that. So you did make a lot of interesting announcements about Red Hat and AI together with the research team at IBM. Can you just share a little bit about for those who might not be quite as familiar about what these announcements are, what specifically are vested?

Question: Wamsi Mohan - BofA Global Research - Analyst : Yeah, absolutely. Can you talk a little bit about the pricing tiers and methodology as you think about like RHEL AI, OpenShift AI, and Watsonx? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JUNE 04, 2024 / NTS, IBM.N - International Business Machines Corp at Bank of America Global Technology Conference

Question: Wamsi Mohan - BofA Global Research - Analyst : That's great. I just wanted to go back, Matt, to your point around using these maybe smaller models or potentially using enterprise data to train and I presume it's lower cost and faster time to market are the primary advantages of being able to do that. What kind of -- or maybe there are other factors that you'd like to bring out as well, and what kind of model sizes or parameters are we talking about in these not super large models?

Question: Wamsi Mohan - BofA Global Research - Analyst : Yeah. No, that's super interesting. So if we were to step back again, just look at the timeframe of enterprise adoption in some ways, right, like you guys have been talking about a book of business where you've been very actively engaged in many, many different programs. Just curious what without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JUNE 04, 2024 / NTS, IBM.N - International Business Machines Corp at Bank of America Global Technology Conference is in your opinion, the right timeframe to think about enterprise adoption around AI, more broadly for the industry because what we've seen so far is very hyperscale driven, very Tier 2 CSP driven, but not really a lot of spend at the enterprise itself?

Question: Wamsi Mohan - BofA Global Research - Analyst : Yeah, and solving some of the COBOL programmers shortage.

Question: Wamsi Mohan - BofA Global Research - Analyst : Well, maybe starting back again, can you just compare Red Hat software stack with versus competitors and where you feel like there's the most differentiation and opportunity for you?

Question: Wamsi Mohan - BofA Global Research - Analyst : Okay. That's super-helpful. Maybe we can talk for a minute about the competitive landscape. There's been a lot of industry consolidation and it's created some shakeup at some of the clients. In particular, when you think about where you had a dominant player in the virtualization market, now having changes as pricing that you alluded to earlier, what is the impact that your business is seeing? And what is the opportunity set that it unlocks for you?

Question: Wamsi Mohan - BofA Global Research - Analyst : You also have a partnership with Nutanix, you mentioned KVM, there's AHV from Nutanix as well. Can you talk a little bit about that partnership and where you see the opportunities there?

Question: Wamsi Mohan - BofA Global Research - Analyst : Okay. Well, you made a pretty big announcement and intention to acquire HashiCorp and called out specific synergies with Ansible. Can you just explain how these solutions complement or are complementary to each other?

Question: Wamsi Mohan - BofA Global Research - Analyst : Okay, great. Red Hat, just when we think about the revenue growth trajectory, right, I think last year we exited the year at a slightly lower rate, sort of reaccelerated from that a little bit now, how do you think about the revenue growth opportunity for Red Hat in the medium and the longer term?

Question: Wamsi Mohan - BofA Global Research - Analyst : Okay, great. And I know that in the past Jim's called out some project-based spending headwinds as well. Are those still persisting? And the reacceleration that you saw, is that more product based reacceleration? Or how would you characterize the mix between those? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JUNE 04, 2024 / NTS, IBM.N - International Business Machines Corp at Bank of America Global Technology Conference

Question: Wamsi Mohan - BofA Global Research - Analyst : Okay, great. I know we don't have a lot of time left, but I'll try to sneak in two quick ones. So maybe just on the go to market, can you talk about sort of any changes that have been made since the acquisition of Red Hat and how you're looking at sort of positioning that on a go-forward basis?

Question: Wamsi Mohan - BofA Global Research - Analyst : That's great. We just have a couple of minutes left. So maybe I'll take the last question out here for you. Well, what are you most excited about from attack or market lens perspective, when you look out over the next three to five years. And you are the perfect person to ask this, given your long history of what you've done in product development over the years.

Question: Wamsi Mohan - BofA Global Research - Analyst : Excellent. On that note, unfortunately, we're going to have to end it over here. Matt, thank you so much for all your insights, really appreciate being here.