From Big Blue to NYU

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Now, we're trying to open up the technology so virtual worlds will become the Internet of the future. Today, you get into Second Life or another virtual world and you go around from one 3D region to another. But that avatar can't leave Second Life. The technology is closed and proprietary. I believe that over time, when you go onto a Web site you'll be going into a 3D world, and you'll go from one 3D world into another one with the same avatar. Instead of experiencing Amazon.com (AMZN) as a flat Web page where you search for books, you'll go into a 3D bookstore. You may wander around and see what other people are reading and looking at. We have been working with the virtual world community to create a set of open standards to help make this happen.

IBM is perennially the leader in U.S. patents awarded, yet the company has in the past few years given away or shared patents in the spirit of the open-source software movement (see BusinessWeek.com, 8/3/04, "Will IBM's Gift Keep on Giving?"). What's the strategy, and how do you see it paying off for IBM?
One of my responsibilities is to look for disruptive technologies and identify them so IBM can, if necessary, disrupt ourselves rather than having one of our competitors disrupt us. One of the ways that's going to change the world is finding fundamentally new ways to innovate. And one of those ways is to be more collaborative and open. But like all disruptive things, this threatens existing businesses. For IBM, it threatens our business where we license intellectual property to others. We could stick our head in the sand and say we're going to treat IP the way we always did, or we can work with open forms of innovation, take advantage of them, and embrace the disruptive technology.

Open collaboration is a classic example of this. Think about Linux, the open-source computer operating system. It takes at least half a billion dollars a year to maintain a world-class operating system. The whole IT industry is spending about $1 billion a year on Linux. We spend about $100 million. So for $100 million we get an operating system that would otherwise cost us half a billion. We can take the money we save and spend it up higher in the value chain. If giving patents to the Linux community allows this open interaction to occur, it's worth more than the patents. It saves us a lot of money, and it enables us as a research organization to do things we wouldn't be able to do otherwise.

IBM Research is one of the last large corporate research labs in the country, now that Bell Labs is gone and other corporate labs have shrunk, what are the negative consequences for U.S. competitiveness?
In this case, I may be a starry-eyed optimist. I believe that there are high-value markets where research can make a difference. It's not Bell Labs, but there will be Microsoft (MSFT) Research, or Google (GOOG) Research, or research in some of the pharmaceutical companies that will grow to fill that role. What we need to do in IBM Research is to make sure that we're innovative enough and evolving enough that we can stay at the leading edge. I'm confident there will be enough good research coming up in the U.S., and new business models coming out of it, to sustain our leadership.

Every year we look at our programs and things that have impacted the market. Last year we had 13 projects that we labeled outstanding accomplishments. Roughly half of them were very exploratory projects that grew organically in research and then over time became part of a joint project with a product division and ultimately turned into a new product and service.

You're only 60 years old. Why are you retiring?
It was time for a change. I'm sure John Kelly will have new ideas—they'll get some new ideas and new blood. And I'm looking forward to doing something different down at NYU. We'll figure out together how I'm going to help change the university.