Big Blue Goes for the Big Win

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Kelly is only seventh director of IBM Research since 1945 Alan S. Orling

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Kelly took a gamble and set up research alliances with a handful of partners, including Sony Electronics (SNE) and Advanced Micro Devices (AMD), to share expenses and brainpower. The approach eventually paid off, as IBM's chip business returned to profitability and remained on the cutting edge of technology. "This is a smart strategy," says Studt. "You can't be the leader all by yourself anymore. The technology is just too complicated and expensive."

The just-unveiled deal with Saudi Arabia is an example of where Kelly is headed. The two sides plan to develop technologies for solar energy and water desalinization. The Saudis chose IBM because of its expertise. IBM scientists won a Nobel Prize in 1986 for nanotech breakthroughs, and they're leaders in developing new nanotech materials. "We want to work with the best in the field," says Turki Saud Al-Saud, vice-president for Research Institutes in King Abdulaziz City for Science & Technology.

Kelly expects the basic research that IBM does with partners to feed back into its own four high-priority projects. Nanotechnology, for instance, will be critical to inventing the successor to today's chips. Performance improvements have been slowing down in the current chip technology, and scientists expect chips of the future to be made with tiny switches built with individual atoms. As part of its effort, IBM announced on Feb. 22 that it had calculated how much force it takes to move a single atom. "If they can come up with a true, game-changing technology, they'll have a clear first-mover advantage and a huge business benefit," says Charles M. Vest, president of the National Academy of Engineering.

Another major research initiative with a big potential payoff is IBM's new computer reengineering project. IBM was at the forefront of redesigning microprocessors, the brains of computers, to include multiple parts, or cores, on a single piece of silicon. That makes it possible for the processors to run at lower power, with less heat. Now the company is designing chips with specialized cores that perform certain kinds of calculations more efficiently, plus software to take advantage of the new processing power. If the project works, it will help IBM strengthen its lead in high-margin server computers.

These are high-risk, high-reward ventures. "Big bets don't scare me at all," Kelly says. "I love this environment. I thrive on it."