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Speaker 3: Hi Malcolm Glawell, and you're listening to Smart Talks with IBM.
Speaker 3: Imagine your business depends on a system you didn't build
Speaker 3: and don't fully control. For years, it works perfectly. It's fast, reliable, afordable,
Speaker 3: so over time more and more of your operations rely
Speaker 3: on it. Then one day the terms change. What once
Speaker 3: felt flexible now feels difficult to leave. Moving to another
Speaker 3: provider or bringing those capabilities back under your own control
Speaker 3: could take years, cost millions, and disrupt the business in
Speaker 3: the process. That's the challenge of digital sovereignty. Businesses today
Speaker 3: rely on all sorts of third party systems, cloud platforms,
Speaker 3: data pipelines, AI models, software tools. Most days, these systems
Speaker 3: operate quietly in the background, but when something changes, like
Speaker 3: costs go up or rules shift, organizations are forced to
Speaker 3: confront how much control and flexibility they actually have. This
Speaker 3: is why digital sovereignty has shifted from policy concept to
Speaker 3: board level priority. So to understand the challenge up close,
Speaker 3: I traveled to Paris to Vivtech, Europe's largest technology conference,
Speaker 3: to speak with two people who think about these.
Speaker 4: Questions every day on a Paula a.
Speaker 3: Cis, IBM's senior vice president and chair for IBM EMEA
Speaker 3: and APAC, and Giovanni Daniello, group chief Information Officer at AKSA. Hello, everyone,
Speaker 3: welcome to a live taping of the podcast Smart Talks
Speaker 3: with IBM. I was downstairs in the IBM booths chatting
Speaker 3: with the people who were doing the data Sovereignty presentation,
Speaker 3: and they were discussing the and I said, oh, it
Speaker 3: sounds like you're solving a headache. And the guy I
Speaker 3: was trying to said, that's all we do at IBM.
Speaker 3: We solve headaches and cure headaches, and I want I
Speaker 3: want to start out with the two of you.
Speaker 4: What is the headache in this instance?
Speaker 5: So the topic of sovereignty gained a lot of traction
Speaker 5: over the past few years, in even though I would
Speaker 5: say it really became a buzzword this year. I think
Speaker 5: that this actually started during COVID, when all the supply
Speaker 5: chains became extremely stressed and companies and governments started to
Speaker 5: understand that there were a lot of choke points in
Speaker 5: the world, right, so how can I do more ear
Speaker 5: shore in how can I guarantee that I have autonomy
Speaker 5: of key elements of my supply chain? I think was
Speaker 5: really the wake up call. And then we entered in
Speaker 5: a period of unfortunately many wars happening constraining for example,
Speaker 5: energy security.
Speaker 6: So all these.
Speaker 5: Disruptions in the world led companies and governments to think,
Speaker 5: what is really that I need to consider as critical
Speaker 5: for me, and how do I have better control of
Speaker 5: those capabilities? And now technology being at the core of
Speaker 5: the operations, I think that actually increased the need.
Speaker 6: For companies to focus on sovereignty.
Speaker 5: So that is the headache given that there are so
Speaker 5: many dependencies, given that we're living in a world that
Speaker 5: is so interconnected, how do you get autonomy, how do
Speaker 5: you get back control making sure that you continue to
Speaker 5: operate in a collaborative ecosystem.
Speaker 7: It's a difficulty equilibrium in reality, because we have to
Speaker 7: take all those dimensions into consideration making sure that at
Speaker 7: the same time we can continue to access innovation. And
Speaker 7: that's where the paradigm is is really very, very complicated
Speaker 7: to solve. So the headache we have in AXA and
Speaker 7: then probably many large organizations in the in the world
Speaker 7: is exactly the topic in Europe at least it's it's
Speaker 7: about sovereignty exactly in the terms you are talking about,
Speaker 7: and that's becoming a topic that is very there is
Speaker 7: a there's a lot of visibility very in the agenda
Speaker 7: at very top executive level since probably it started with Coviy,
Speaker 7: I agree.
Speaker 2: But the last two years there's been an acceleration clearly.
Speaker 6: Yeah, and I really have a few data points.
Speaker 5: Today we announced a study through our IBM Institute of
Speaker 5: Business Value where basically we as companies around the world,
Speaker 5: So do you have visibility of your dependencies?
Speaker 3: Right?
Speaker 5: Do you know exactly where are your exposures? And only
Speaker 5: nine percent of the companies said that they have that
Speaker 5: level of visibility, and seventy one percent of the company
Speaker 5: said that if they needed to switch a provider today,
Speaker 5: it would be very.
Speaker 6: Difficult to do so.
Speaker 5: So I think the headache this is actually shows in
Speaker 5: numbers the size of the headache.
Speaker 3: Yeah, you're in the insurance business. Speak to the specifics
Speaker 3: of your own business. Why would this be an issue that?
Speaker 3: Am I right in thinking that this is an issue
Speaker 3: that is a specific and special concern to an insurance.
Speaker 2: No, I don't think so.
Speaker 7: No, No, I don't think so, because in reality, it's
Speaker 7: an issue for organizations using technology data in AI as
Speaker 7: an important driver within the activities they manage.
Speaker 2: Insurance.
Speaker 7: Of course, insurance is about data, it's about people, it's
Speaker 7: about technology, of course, so it's very very central.
Speaker 2: But it's absolutely not limited to insurance.
Speaker 7: Because at the end, if we want to talk a
Speaker 7: little bit more into details, what is sovereignty Because everybody
Speaker 7: talks about sovereignty, but what is it about? And very
Speaker 7: often people believe that once you know where your data
Speaker 7: are located and if you are your open company, if
Speaker 7: you have the certainty that data are located in Europe.
Speaker 7: Many people believe I'm safe, I'm sobeer incompatible. Well it's
Speaker 7: absolutely not enough. So there are models that not only
Speaker 7: we are using an accept that are also very very
Speaker 7: public on the market. Very often will refer to four dimensions.
Speaker 7: Of course, allocation is number one. If you don't know
Speaker 7: where your data are, I mean, you don't know anything.
Speaker 7: But it's not only that, I mean how do you operate?
Speaker 7: Who is operating the system, who is patching, who is
Speaker 7: creating new versions of whatever the feature that becomes available.
Speaker 2: That's the second one. The third one is contracts, legal terms.
Speaker 7: Who is in charge legally speaking of the activities we
Speaker 7: talk about, and and and the last one is the
Speaker 7: technicality itself. Who is really mastering the technical details the
Speaker 7: underlying stack. Is it something that is European, US, China?
Speaker 2: You know? And I mean it's it's it's known by everybody.
Speaker 7: Most of the large European companies and US companies are
Speaker 7: using US technologies. So the difficulty in soeranties to scan
Speaker 7: on a permanent basis the four dimensions. Making sure that it,
Speaker 7: as we're saying, anow that you know exactly what is
Speaker 7: exactly the situation on your business on those four dimensions.
Speaker 3: Give me an example of how a specific example of
Speaker 3: what difference it would make where your data was being held.
Speaker 3: In other words, in what sense our regulatory requirements for example,
Speaker 3: different from one country to another, or from the EU
Speaker 3: to North America Or is there a practical way to
Speaker 3: kind of express those differences.
Speaker 6: Yeah, there are.
Speaker 5: Very clear regulations in many of the countries regarding what
Speaker 5: type of data needs to reside inside the country, right,
Speaker 5: so particularly financial data, health data, those are really really
Speaker 5: controlled and they have to follow those regulatory requirements. So
Speaker 5: the way that we approach that in our architecture in
Speaker 5: our platform is to enforce those regulator regulatory requirements within
Speaker 5: the platform so that this is not just relied from
Speaker 5: a contract toal standpoint, but that you ensure with governance
Speaker 5: tools and with capabilities that the platform is securing that
Speaker 5: data in compliance with those regulatory aspects. And when you
Speaker 5: think about sovereignty, it has to go beyond just the
Speaker 5: regulatory and compliance requirements. It's really understanding your business requirements.
Speaker 6: What are the.
Speaker 5: Applications that are truly mission critical and that you need
Speaker 5: to ensure that have that level of control because also
Speaker 5: controlling everything is not necessarily viable, not from a technical
Speaker 5: standpoint and not from a business case standpoint, right, So
Speaker 5: that is the I think that is the challenge that
Speaker 5: many companies are going right now, is to have the
Speaker 5: visibility of their application mistake, how that matches the business strategy,
Speaker 5: and then making the decisions on what is the level
Speaker 5: of sovereignty that I need to apply.
Speaker 3: Let's say I'm a naive company, I don't pay any
Speaker 3: attention to this, I have operations in any different countries.
Speaker 3: What's the worst case scenario, what's the down What's what
Speaker 3: happens if you don't act kind of prudently around data sovereignty.
Speaker 5: So I think the first aspect is if something happens
Speaker 5: to your infrastructure that is sitting somewhere that you don't
Speaker 5: have visibility, goes out for some reason, a war and
Speaker 5: energy blackout, any other cyber attack in your environment, if
Speaker 5: you don't have a fallback plan, if you don't have
Speaker 5: a way to move that application to operate from another
Speaker 5: place that has the backups the real time data that
Speaker 5: you are accessing to your.
Speaker 6: Pretty much go out of out of operations, right. So
Speaker 6: it's a.
Speaker 5: That's a very important question because I think it brings
Speaker 5: the sovereignty aspect to what I believe is the strategic
Speaker 5: role that it plays. It's about resiliency, it's not about
Speaker 5: necessarily just meeting regulatory requirements, and I think you need
Speaker 5: to do that from a risk management standpoint, and I
Speaker 5: think an insurance company is the best position to do that.
Speaker 5: But it's not just regulations, it's really making sure that
Speaker 5: you have continuous operation twenty four by seven, which is
Speaker 5: pretty much what businesses need to achieve.
Speaker 7: Currrectly in some countries for insurance, for example, but not
Speaker 7: only for insurance. In some countries there are obligations locally,
Speaker 7: for example, to store data in the country. So back
Speaker 7: to your question, there's a limit to how naive you
Speaker 7: can be if you want to develop a business, because
Speaker 7: that's at the heart of getting the authorization to operate
Speaker 7: and to run your business in the countries where you
Speaker 7: would like to. But then once you are over this
Speaker 7: kind of MVP of requirements that are mandatory for you
Speaker 7: to open and operate, then of course, I mean that's
Speaker 7: a good thing that an What you said is completely
Speaker 7: completely relevant.
Speaker 3: How does how does one anticipate these issues changing over time?
Speaker 4: In other words, you said that people are going to
Speaker 4: wake up to the importance of data sovereignty during COVID.
Speaker 3: I'm just curious if we fast forward five years, do
Speaker 3: we imagine that the kind of landscape in which companies
Speaker 3: like you as you and are operating is going to
Speaker 3: get more complex or less complex? What's the what's the
Speaker 3: movement in this?
Speaker 5: I think it's going to become more complex because AI
Speaker 5: is really accelerating all the trends.
Speaker 3: Why I want you to can you expect I want
Speaker 3: you to kind of do a little deep dive on AY,
Speaker 3: what specifically is it about AI that's complicating this?
Speaker 6: That's a very good question.
Speaker 5: AI now moves from you know, actions just being taken
Speaker 5: from you know, somebody operating a system to the technology
Speaker 5: actually making decisions. Right, So you have to have a
Speaker 5: much better visibility of what systems AI is touching, what
Speaker 5: data it is accessing, and where, right. So you have
Speaker 5: to have that mapping much more clear because the stakes
Speaker 5: are higher now on how technology is actually operating your business.
Speaker 6: Right.
Speaker 5: So I do think that there is an acceleration because
Speaker 5: of that. The second element, AI is going to increase
Speaker 5: the amount of vulnerabilities that are going to be either
Speaker 5: identified or created. So you have to have an ability
Speaker 5: to continuously monitor and scan what is happening in the
Speaker 5: cybersecurity landscape so that you can prevent and react in
Speaker 5: a much faster way. So there are more elements of
Speaker 5: disruption that are coming up as a result of the
Speaker 5: acceleration of technology.
Speaker 7: I can give you a concrete example. The way applications
Speaker 7: work today is pretty much deterministic. You have rules, you
Speaker 7: have data, you have processes. Very often embed it into
Speaker 7: the the code, into the business logic. So these are
Speaker 7: executed and very often if you have the same input,
Speaker 7: you have the same output. And so you have I
Speaker 7: mean application with modules, you have APIs, you have data,
Speaker 7: you have you know beautiful.
Speaker 2: Mobile first front ends.
Speaker 7: You know all these fancy things that we that we
Speaker 7: run on the cloud or on premium whatever. So let's
Speaker 7: project yourself into a couple of years from now where
Speaker 7: the architecture is going to be agentic native.
Speaker 2: With concepts such as head less applications.
Speaker 7: So you will interact with kind of prompt interface and
Speaker 7: you will start asking as a customer or as an
Speaker 7: employee or as a partner, you will ask interacting and
Speaker 7: asking a certain number of problems to be solved, and
Speaker 7: this is going to be given through tokens and all
Speaker 7: these all these technologies into an ecosystem of digital agents
Speaker 7: orchestrated and orchestrating activities looking at what is in the
Speaker 7: in the rug in terms of what is the process
Speaker 7: telling me about how do I have to manage that?
Speaker 7: What kind of data do I have in my repository?
Speaker 7: And you enter into something which is going to become
Speaker 7: much more probabilistic, and you have llms there in the
Speaker 7: meantime in the middle trying to get answers smart answers
Speaker 7: to queries that will come from.
Speaker 2: Specialized digital agents.
Speaker 7: So there's nothing to do with the way applications run today.
Speaker 7: And if you look at the flow of data today
Speaker 7: that we know, we know where the data located. That
Speaker 7: was saying you know a lot of things we know
Speaker 7: and how the data is going to flow in all
Speaker 7: the directions in this Argentic native architecture. You understand that,
Speaker 7: as you said, this is going to accelerate significantly and
Speaker 7: the need to understand the underlying stack and architecture in
Speaker 7: the sovereign the ecosystem is going to be crucial. You know,
Speaker 7: data can suddenly become public public in the way they
Speaker 7: can be used to train models and a little bit
Speaker 7: of your IP step by stead of going to go
Speaker 7: into those those models if they learn if you are
Speaker 7: not careful, that's what it's going to happen. Of course,
Speaker 7: there are ways to prevent that, but if you're not careful,
Speaker 7: you can suddenly see the world around you becoming more
Speaker 7: intelligent than you on your own business.
Speaker 3: It seems like there's a this is a very crude
Speaker 3: way of putting it, but there's a race going on
Speaker 3: with the technology on running one race and then the
Speaker 3: other race. Is our ability to kind of make sense
Speaker 3: of it, have visibility and it integrate the technology into
Speaker 3: the way we.
Speaker 4: Do our who's winning that race right now? Is it?
Speaker 4: Is it hard to keep up with the technology.
Speaker 5: That's why I think you need the technology to govern
Speaker 5: the technology right and and and to me, that is
Speaker 5: what our proposition with this platform that we launched a
Speaker 5: few weeks ago called Sovereign Core, is to provide that
Speaker 5: those that tool in and those capabilities to help organizations
Speaker 5: create those capabilities. Because what we learned already is that
Speaker 5: as your Money explained very well, the technology is going
Speaker 5: to accelerate exponentially. How do you map that with that
Speaker 5: same level of speed only another technology that is going
Speaker 5: to you know, operate at the same level of acceleration.
Speaker 6: And that is.
Speaker 5: Exactly the proposition that we have in supporting our clients.
Speaker 5: So that's the headache that you're trying to solve.
Speaker 3: Givani, do you I'm assuming you've been in this field
Speaker 3: of technology.
Speaker 2: For how many years or thirty years?
Speaker 3: Is there any I'm curious to compare the moment we're
Speaker 3: into any previous moments. So you've now lived through several
Speaker 3: technological uphea How does this one compare to the ones
Speaker 3: earlier in your career?
Speaker 7: For me, this one is very clearly the one that
Speaker 7: has the highest potential and in terms of speed, there's
Speaker 7: no precedent everything we've done in the past where we've been.
Speaker 2: Trying to modernize.
Speaker 7: Let's take a complete, complete exam modernizing business applications. We
Speaker 7: had this discussion a couple of months ago. So like
Speaker 7: all the companies in the world, we have legacy applications.
Speaker 7: All the companies have legacy applications that have been written
Speaker 7: I don't know, thirty fifty years ago, and the journey
Speaker 7: to modernize those applications has been the last let's say,
Speaker 7: the last fifteen years, something like very often a five
Speaker 7: years ticket. Every time you wanted to work to modernize something,
Speaker 7: including migration and decommissioning. And every time we even a
Speaker 7: year ago, every time we were thinking about how there's
Speaker 7: technology out there we can go much, much, much faster,
Speaker 7: we've always been blocked, and then we always came back
Speaker 7: to that unit of performance of the five years. And
Speaker 7: since this year, things are become potentially feasible, because that's
Speaker 7: the Augentic revolution, because then you can specialize agents like
Speaker 7: people in a team, to split the process into subtasks,
Speaker 7: and everybody is going to be very smart and intelligent
Speaker 7: in solving a part of the problem.
Speaker 2: And then if you are good enough to.
Speaker 7: Orchestrate that towards an outcome, which could be an application, modernization, ABC, whatsoever.
Speaker 7: Potentially I'm saying potentially, but this is now technologically we
Speaker 7: see that it can work. You can do that, not
Speaker 7: any more than five years, but maybe I don't know,
Speaker 7: a year and a half, two years, maybe a little
Speaker 7: bit less. Why not, I don't know, but you see,
Speaker 7: the difference is simply huge. I've never seen that before.
Speaker 6: Yeah, yeah, I agree with that.
Speaker 5: I think the compression that you're seeing in project delivery,
Speaker 5: new products that we are releasing, updating versions of products,
Speaker 5: it's something that is absolutely unprecedented. So the base of
Speaker 5: innovation is happening very fast. And if we think that
Speaker 5: AI has already created a tremendous impact, let's wait for quantum, right,
Speaker 5: which is going to even take this to another level.
Speaker 2: And the mixed the combination, the prombination of both.
Speaker 4: Yes, it's a very.
Speaker 3: Interesting contradiction at the core of all this, which is
Speaker 3: that intuitively, we know that innovation thrives on openness into connectedness,
Speaker 3: you know, no border or whatever. But so datus already
Speaker 3: makes us think very specifically and often, I would imagine,
Speaker 3: painfully about the reality of orders.
Speaker 4: How do you manage that contradiction?
Speaker 5: I think that is really the challenge that we are
Speaker 5: all facing right now, right I don't think we have
Speaker 5: one hundred percent clear answer yet. There are certain elements
Speaker 5: of this tack that clearly, I mean, trying to reinvent
Speaker 5: is actually going to be a reinvention of the wheel,
Speaker 5: Like I mean, I'm not going to develop chips from
Speaker 5: the scratch from scratch, for example, infrastructure from scratch, but
Speaker 5: there are other elements of the stack that I can
Speaker 5: get much better control.
Speaker 2: Right.
Speaker 6: So for example, to the point that you'vanni made before, where.
Speaker 5: My data is sitting, what is the orchestration layer that
Speaker 5: I can implement so that I can bring the right
Speaker 5: player at the right time. So look at the stack
Speaker 5: of technology that you are implementing and see what are
Speaker 5: the elements where number one, it's feasible to achieve control
Speaker 5: and number two, I know that it's something that I
Speaker 5: actually have to do to make my business resilient. And
Speaker 5: focus on those, right, because if you try to address
Speaker 5: the entire stack, or if you try to create a
Speaker 5: model that basic build a fortress, that's not going to.
Speaker 6: Be even feasible for you to achieve.
Speaker 5: Right, And normally say that sovereignty is not about building walls,
Speaker 5: it's about building bridges, right, It's how you really created
Speaker 5: those connections.
Speaker 2: I like, I like the way you phrase it.
Speaker 7: That's exactly that, because at the end, if you put
Speaker 7: sovereignty as an architecture requirement when you do design, I
Speaker 7: don't say it's the it's it's it's the key to
Speaker 7: this very difficult you know, parading, but at least.
Speaker 2: It's making choices easier.
Speaker 7: So, for example, if you if you don't put sovereignty
Speaker 7: as a business requirement, and you want to develop your
Speaker 7: business in the cloud, what you are going to.
Speaker 2: Do is probably look at the available features that ive
Speaker 2: features from the cloud provider. You're going to use those
Speaker 2: features full speed to go.
Speaker 7: As fast as possible, as efficient as possible, and get
Speaker 7: access to all the stack innovation and everything else. And
Speaker 7: the day you have a problem, you cannot switch, or
Speaker 7: it will take you five years and five hundred million
Speaker 7: to switch.
Speaker 2: If you take the.
Speaker 7: Sovereignty as a requirement by design, when you want to
Speaker 7: start the configuration of your stack, you ask yourself, what
Speaker 7: do I have to concretely put here as a configuration item?
Speaker 7: If I want to be, for example, multi cloud compatible
Speaker 7: or multi cloud and on prem compatible, what kind of
Speaker 7: additional technologies maybe I have to use in order to
Speaker 7: be able to I mean, do some portability of some
Speaker 7: workload from one platform to another. Not because I want
Speaker 7: to do that every day, because it makes no sense.
Speaker 7: But if tomorrow I have a problem, I want to
Speaker 7: be sure that by design I can I know what
Speaker 7: the process I'm going to use. What's the process is
Speaker 7: going to use to do that portability. So these are
Speaker 7: elements that again, if you do design your architecture using
Speaker 7: those those elements, you wake up in the morning you
Speaker 7: have a problem and you have no solution except spending
Speaker 7: alpha billion euro. So that's that's that's the first point
Speaker 7: I wanted to make. Now the second point is if
Speaker 7: you want to turn technology into a business outcome, at
Speaker 7: the end, you need to be very precisely activating a technology.
Speaker 7: So at the end you have to make a choice,
Speaker 7: yes I activate this feature you know, and yes I
Speaker 7: use this tech provider this solution.
Speaker 2: At the end, you don't escape.
Speaker 7: And what it also allows to do is making sure
Speaker 7: that in this architecture based design you also make explicit
Speaker 7: what you buy from a tech provider and what you
Speaker 7: do yourself, and also what you do yourself for how
Speaker 7: long because you can try a certain number of things
Speaker 7: because you are not convinced that a certain number of
Speaker 7: technology providers out there are sufficiently cross cross cloud platforms,
Speaker 7: and and you don't want to end up into a
Speaker 7: looking situation. So you can say I don't feel that
Speaker 7: it's mature enough, so I start doing it. But it's
Speaker 7: not because you start doing it yourself, that you have
Speaker 7: to be stuck in that strategy of doing it yourself
Speaker 7: for fifteen years. Again, even if you start doing it yourself,
Speaker 7: in the design of the way you do it yourself,
Speaker 7: you plan an exit door to be able to move
Speaker 7: into a solution from a tech provider when the strategy
Speaker 7: is mature enough. So that's the difficulty, and that this
Speaker 7: is every day discussions with discipline. What I always recommend
Speaker 7: the teams is make the things explicit.
Speaker 2: There's no right or wrong answer in a limited timeframe.
Speaker 7: There is something that is today for the company and
Speaker 7: may not be the case tomorrow. So let's make it
Speaker 7: explicit and don't miss that that that I mean that
Speaker 7: extra work because it's extra work.
Speaker 2: This is not something that is coming really not falling
Speaker 2: from the sky. This is extra work. But it's worse
Speaker 2: doing this this job.
Speaker 7: To be sure that at least we are always in
Speaker 7: this equilib difficult equilibrium between accessing technologies and being sovereign
Speaker 7: compatible by design.
Speaker 5: Just to stress you saw that Jovan used the word
Speaker 5: by design all the time, right, because I think that
Speaker 5: intentionality is probably what's different from what we saw in
Speaker 5: the past on how companies were adopting innovation, It was
Speaker 5: very much driven by convenience and speed, and now you
Speaker 5: have to have convenience, speed and intentionality and understand that
Speaker 5: you know, you have to have visibility on the decisions
Speaker 5: you're making, and you have to keep your choices more open.
Speaker 3: It was curious when you describe the kind of challenges
Speaker 3: that come along with data sovereignty.
Speaker 4: This is also the way that two of you work together.
Speaker 4: So I can.
Speaker 3: Companies Insurance have been working with IBM, I imagine for
Speaker 3: as long as they've been insurance and as long as
Speaker 3: they've been IBM. But I mean, in this particular iteration,
Speaker 3: are we altering the nature the relationship.
Speaker 5: Before I go specifically to the partnership with as, I'm
Speaker 5: going to give an example of what you're doing with
Speaker 5: another company, which I think illustrates very well the intention,
Speaker 5: the objective and the challenge.
Speaker 2: Right.
Speaker 5: So we have a partnership with Locale as well, right,
Speaker 5: which is the cosmetics company. And they were like, okay,
Speaker 5: foundational models, large language models.
Speaker 6: Are super powerful.
Speaker 5: Right, But I invested one hundred years in my company
Speaker 5: to build knowledge about building formula for cosmetics. Right, I
Speaker 5: don't want to give that expert is that knowledge away?
Speaker 5: So I want to train my own my own foundational model.
Speaker 6: They are not going to do the.
Speaker 5: Entire stack of training by themselves, so they partner with us.
Speaker 5: We provide research, We provide tooling that allows them to
Speaker 5: bring their data and create their own model based on
Speaker 5: an open source pre trained a model. So these are
Speaker 5: the types of you know, challenges that companies are facing.
Speaker 5: And to my point prior what is really critical, to
Speaker 5: the point that you don't want, you know, a third
Speaker 5: party to have visibility or access to And when it
Speaker 5: comes to the to the relationship with ACTS and many
Speaker 5: other of our clients, I think number one is transparency. Right,
Speaker 5: they totally understand how our technology operates. What are the
Speaker 5: you know, what are the elements that are part of
Speaker 5: our architecture that are going to connect with their systems,
Speaker 5: and trust becomes really a fundamental element.
Speaker 6: Jovanni said.
Speaker 5: There are things that I'm going to build, there are
Speaker 5: things that I'm going to buy, So who am I
Speaker 5: going to buy from? Does this company really understand sovereignty
Speaker 5: by design? It's part of the way that the architecture
Speaker 5: their solutions. I think those are the elements and I
Speaker 5: think that's why this discussion is so important right now
Speaker 5: because it also levels the playing field for us. Right
Speaker 5: at IBM, we have always been a company focused on
Speaker 5: technologies for the corporate world.
Speaker 6: To really implement mission critical workloads. So I think now.
Speaker 5: People understand why we approach things the way we approach
Speaker 5: and why hybrid cloud, you know, giving companies the ability
Speaker 5: to access multiple providers either on prem or in the
Speaker 5: public domain. Why we have approached our technologies in that
Speaker 5: characterization is because we are starting to see the challenges
Speaker 5: of not having a multi cloud. Hybrid cloud strategy can
Speaker 5: act actually imply to your business. So I think that
Speaker 5: this is really what changes for us now we have
Speaker 5: we we are much more conscious on the risks and
Speaker 5: those have to be considered when you are making technical decisions.
Speaker 2: Yea, I think in contact remre with with what you said.
Speaker 7: That's that's that's at the heart of the relationship between
Speaker 7: company like accesle and and and.
Speaker 2: A strategic partner technology partner.
Speaker 7: If if that understanding is not there, there is no
Speaker 7: way we are going to rely on that strategic partner
Speaker 7: to build whatever future strategic orientation and and and it's
Speaker 7: true that today we have a large variety of technologies
Speaker 7: running in production as an insurance company. Like banks, we
Speaker 7: have mainframes running a lot of a lot of business.
Speaker 7: But at the same time we are full speeding the
Speaker 7: AI transformation. We have finished the cloud migration and being
Speaker 7: able to understand the full stuck again, that's what is
Speaker 7: absolutely critical.
Speaker 3: I had asked you earlier about was there anything particular
Speaker 3: about the insurance business when it came to this question.
Speaker 3: I want to come back to that a little bit,
Speaker 3: because you know, you've both of you have talked about
Speaker 3: trust and transparency. Our trust and transparency pretty core considerations
Speaker 3: for insure, I mean, much more so than someone that
Speaker 3: yeah making you know, handkerchiefs.
Speaker 4: Talk a little bit about Can you revisit that question?
Speaker 7: Yeah, of course, I think you have a very good
Speaker 7: point if I look at the notion of trust. As
Speaker 7: you said, insurance is about trust, the noble purpose of
Speaker 7: an insurance company.
Speaker 2: That's what I repeat every time I have the opportunity.
Speaker 7: You know, I'm so happy every morning when I wake
Speaker 7: up because I know what I'm waking up.
Speaker 2: AX is there.
Speaker 7: To help families, companies, individuals when they face real difficulties.
Speaker 2: You know why you wake up every morning.
Speaker 7: You know what is why it's difficult and this implies,
Speaker 7: as you said, the notion of trust. So of course
Speaker 7: for us what it means, it means one, we need
Speaker 7: to make sure you were talking about data healthcare data.
Speaker 2: And your initial intervention.
Speaker 7: We need to make sure indeed we know perfectly exactly
Speaker 7: where our data are stored and what kind of data
Speaker 7: we talk about, where is it sensitive data health data,
Speaker 7: because we need to overprotect that in order to make
Speaker 7: sure that data that we have for our customers are
Speaker 7: not going to be made public. You know, that's our
Speaker 7: duty to do that. It's again a notion of trust.
Speaker 7: Our customers trust that we do that. Insurance companies are
Speaker 7: long term companies, and if you don't have trust anymore,
Speaker 7: I mean, we're simply out of business. So data is
Speaker 7: an important topic. But at the same time we talked
Speaker 7: about cyber You know, we have a very very strong
Speaker 7: cyber team and cyber security practice that we use both
Speaker 7: of course to protect AXA like many organisms. I mean
Speaker 7: we all do that, of course, but also to help
Speaker 7: our customers protect themselves.
Speaker 2: And we have also used our.
Speaker 7: Skills to develop insurance products for companies to protect them
Speaker 7: against cyber risks. So that's also our duty to say
Speaker 7: not only we develop those skills, but we also give
Speaker 7: that skill back via an insurance product to our customers
Speaker 7: because we want.
Speaker 2: To help them.
Speaker 7: And then, of course back to the notion of trust itself,
Speaker 7: if those elements are there at the end, what we
Speaker 7: believe as an insurance company, and I agree with you
Speaker 7: this is valid for the insurance sector in general, is
Speaker 7: that if we continue to demonstrate then to do that
Speaker 7: very seriously, our customers continue to have a lot of
Speaker 7: trust in us, and probably with the air revolution, the
Speaker 7: ones who will be able to be better, if I
Speaker 7: can use that word, will be the ones who will
Speaker 7: be able to continuously demonstrate that they can they always
Speaker 7: deserve the trust that they received from from from their customers.
Speaker 7: So yes, of course this is specific. I mean the
Speaker 7: specific to the insurance sector. Probably things also such a
Speaker 7: you know, pharmaceutical companies, you know things activities where it's
Speaker 7: very very sensitive.
Speaker 2: Yeah, that that's clear.
Speaker 3: Let me ask a question an other way and maybe
Speaker 3: Honor you can jump in here. These considerations might differ
Speaker 3: from industry to industry, but can you what about from
Speaker 3: big to small? Are is this a more pressing issue
Speaker 3: for a multinational than it is for a startup.
Speaker 5: I think that this is this this applies to all
Speaker 5: all the companies, right, especially because they startups from today
Speaker 5: are not like the startups from the past. Right, everybody
Speaker 5: is scaling so fast, right, You're you're seeing companies going
Speaker 5: from zero to billion in like months in the current
Speaker 5: in the current world, all these startup startups in general,
Speaker 5: they operate in a global in a global footprint. So
Speaker 5: if I am a startup going into the let's say
Speaker 5: the healthcare, right industry, I'll need to follow the regulations,
Speaker 5: even if I'm a very small startup, right. So I
Speaker 5: do think that probably what is happening now is that
Speaker 5: this applies to different sizes, different industries, probably some more
Speaker 5: regulated than others. And going back to the point of
Speaker 5: Giovanni on insurance, I think insurance is probably the industry
Speaker 5: where this is much more visible, because insurance is about
Speaker 5: pricing risk, right, and how do you price risk based
Speaker 5: on knowledge, based on probabilities? And that's all data, right,
Speaker 5: So data is their product, I would say. But every
Speaker 5: company now will have to be watching those aspects because
Speaker 5: as they scale, even if they are small, they'll need
Speaker 5: to be meeting those requirements.
Speaker 3: If you were to chat with a founder who's just
Speaker 3: starting out, came to you and said, what should I
Speaker 3: be doing about data?
Speaker 2: Sovereignty?
Speaker 3: Should what should I get right on day one? What
Speaker 3: would your advice be?
Speaker 5: I think now it's much easier because when you're starting
Speaker 5: from scratch, you can really design your solutions and your
Speaker 5: applications already with all that in your mind, right, So
Speaker 5: all the points that you're going to made before by design,
Speaker 5: this is how you're going to design upfront. Understand what
Speaker 5: industry are operating in. Understand what are the implications of
Speaker 5: the data that you're manipulating, Map the risk and the
Speaker 5: critical mission applications that you're going to develop. Make sure
Speaker 5: that those are really like sovereign to the core, and
Speaker 5: you know, start the execution.
Speaker 7: We have not been talking a lot about that, but
Speaker 7: if I look at Europe now, for example, encryption is
Speaker 7: very critical. When you talk sovereignty, everything you said is
Speaker 7: absolutely correct. But that's an advice I would give is
Speaker 7: make sure, for example that the management of the keys
Speaker 7: is yours is yours, and do that from day one.
Speaker 7: Don't do that because when you do encryption, very often
Speaker 7: That's what I was saying earlier. So you have native services,
Speaker 7: for example coming from the cloud providers, and you can
Speaker 7: encrypt using the native services, and this toward the keys
Speaker 7: of course that have been used to do this encryption,
Speaker 7: and it's very comfortable. You can go very you can
Speaker 7: be very fast, but you lose control M and so
Speaker 7: that's that's a very simple trick that in the design
Speaker 7: very often now comes on a regular business to pay attention.
Speaker 7: Of course, you can use the services, but again storing
Speaker 7: the keys, the keys are yours, so then nobody can
Speaker 7: access your data.
Speaker 4: This is a really.
Speaker 3: Interesting theme that I'd love to sort of end on,
Speaker 3: which is it seemed like there was a moment in
Speaker 3: the evolution of technology where the trend was in the
Speaker 3: other direction that I was, you want to do outsources
Speaker 3: as much as you could and just focus on a
Speaker 3: few things. But now you're talking about the importance of
Speaker 3: taking back control.
Speaker 4: Is that? Am I right?
Speaker 3: Is this a shift across a number of different dimensions
Speaker 3: when it comes to technology right now?
Speaker 2: Yeah?
Speaker 5: I think technology now is so core to the business,
Speaker 5: is so central to the strategy that you really have
Speaker 5: to take it like any other major component of your
Speaker 5: supply chain. And to me, that's the reason why we
Speaker 5: have this wake up moment where people understand that I
Speaker 5: need to put much more control, I need to have
Speaker 5: much more visibility.
Speaker 2: The regulation itself is also creating, in a way the
Speaker 2: obligation for us for.
Speaker 7: Certain activities to have those activities back under our control.
Speaker 7: For example, if I look at DORA regulation, what is
Speaker 7: DORA regulation telling you? Understand your key business processes, map
Speaker 7: those key business processes to your underlying technology.
Speaker 2: Check where you have concentration risks.
Speaker 7: Mapping again starting from your very critical business processes. And
Speaker 7: once you've identified the areas where you have concentration, which
Speaker 7: is normal, plan strategies, right strategies, test strategies on reversibility
Speaker 7: and so this is.
Speaker 2: A couple of years ago. We were doing that on
Speaker 2: I would.
Speaker 7: Say, just when we were feeling that something in a
Speaker 7: specific area of the architecture was a little bit strange.
Speaker 2: Then we were doing a deep dive.
Speaker 7: And we were very often arriving at the conclusion that
Speaker 7: probably there we need to change something. Let's change the technology,
Speaker 7: create more portability and bring the thing under control. But
Speaker 7: it was really sporadic, you know, it was not systematic.
Speaker 7: With the regulation now it's mandatory. We are as an
Speaker 7: insurance company, we have to demonstrate every year we do
Speaker 7: the job. So you see, I think you are totally
Speaker 7: right in saying that we need to make sure we
Speaker 7: have a certain number of activities back under our control.
Speaker 7: But it's not only us deciding that. I think it's
Speaker 7: also regulations forcing us. And from that perspective at to say,
Speaker 7: this was a very good initiative.
Speaker 4: So that.
Speaker 3: When you started, Giovanni and you're in this field, you
Speaker 3: were probably either down the hall or on another floor,
Speaker 3: and now.
Speaker 2: You have to be.
Speaker 4: Directly in the C suite.
Speaker 3: I mean, these are it's over the course of your
Speaker 3: career you've probably gone from being marginal to being essential,
Speaker 3: which is very fascinating. I'm wondering did you Did you
Speaker 3: anticipate that transformation a.
Speaker 7: Little bit, yes, because I've always been convinced that in reality,
Speaker 7: the more the world was going to modernize and digitize,
Speaker 7: the more the technology was going to be inevitable. But
Speaker 7: again I was I've not anticipated the speed of the
Speaker 7: current description that I've not anticipated. You know, I was
Speaker 7: thinking about some of the statements that I was making
Speaker 7: five years ago, announcing that a certain number of elements
Speaker 7: we're going to upen probably you know, five two time
Speaker 7: years time frame. In the meantime it's over. We have
Speaker 7: already another disruption, you know. And I'm not talking fifty
Speaker 7: years ago. I'm just talking five years or ten years ago.
Speaker 2: So yeah, I.
Speaker 7: Always had that feeling that technology was going to be
Speaker 7: really critical.
Speaker 2: But I have to be honest and not honest, not
Speaker 2: that the level it is today.
Speaker 3: Yeah, the irony of this conversation is that I over
Speaker 3: the I've been a journalist for several decades and I
Speaker 3: realized a few months ago that my data, in which
Speaker 3: case is just interviews, you know, interview tape and transport,
Speaker 3: was scattered across a million different places. So I did
Speaker 3: my own version of this, and I hired a twenty
Speaker 3: one year old to sit in my hope and physically
Speaker 3: go through all my old archives. I'm doing my own
Speaker 3: version of Malcolm Data. Sovereignty is going on this summer
Speaker 3: a lot less elaterate.
Speaker 6: Good practice, good practice.
Speaker 4: Yeah that's good.
Speaker 3: But thank you very much for joining us on Smart
Speaker 3: Talks at IBM, and good luck and thank you all
Speaker 3: out there for coming and listening.
Speaker 4: Thank you, thank you.
Speaker 3: Smart Talks with IBM is produced by Matt Ramano, Amy Gains, McQuaid,
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