Why IBM and Salesforce Are Partnering To Sell AI Services

In an era of complex offerings, collaboration is a means of optimizing an enterprise's resources and capabilities that provides a better return than investing in expensive new technologies. The question is to what degree this may lead to greater consolidation or fragmentation.

Given the emphasis on scale and growth in a global market, the success of this sort of partnership will depend on how each organization assesses the relative benefits. Recent history suggests the probability is on getting larger, not smaller. JL

Jay Greene and Ted Greenwald report in the Wall Street Journal:

The companies offer AI services that weave the conversation and learning capabilities of IBM’s Watson with Salesforce’s sales-oriented Einstein technology. The offerings are aimed at helping companies better target products and services at customers. The agreement is IBM’s latest move to put Watson in front of a broad business audience. For Salesforce, the deal adds IBM’s AI capabilities to its products as it faces competition from  Microsoft and Oracle.
International Business Machines Corp. and Salesforce.com Inc. agreed to mingle their artificial-intelligence technologies in a bid to boost sales of data-analytics offerings.
The companies Monday announced plans to offer integrated AI services that weave the broad human-like conversation and learning capabilities of IBM’s Watson with Salesforce’s more sales-oriented Einstein technology. The new offerings, available in the second half of the year, are aimed at helping a wide variety of companies better target products and services at customers.
The agreement is IBM’s latest move to put Watson in front of a broad business audience. The company has tailored its artificial-intelligence system, a linchpin of its effort to reinvent itself for the cloud-computing era, for a variety of industries including health care, financial services and automobiles. The Salesforce deal potentially could make the system available to any company with a sales team.
For Salesforce, the deal adds IBM’s broader AI capabilities to its products as it faces increasing competition from tech powerhouses such as Microsoft Corp. and Oracle Corp. As part of the deal, IBM agreed to use Salesforce’s customer-service software companywide, giving Salesforce a marquee customer.
IBM and Salesforce aren’t sharing revenue, but rather plan to continue selling their AI services independently. The bet is both companies will reach more customers as those capabilities work together than they would have separately.Einstein is designed to understand information collected by Salesforce’s customers that fits neatly into specific categories, such as the number of purchases a specific customer has made.
Watson specializes in interpreting information that hasn’t been categorized, such as the text of research papers or social-media posts. Much of that information comes from public sources, as well as from data sources IBM has purchased. Its capabilities are largely available as a set of cloud services customers can program into their own software.
Together, for example, Watson could weave predictions about local buying patterns with Einstein’s customer-specific data about shopping preferences. That could help retailers automatically send highly personalized and localized email campaigns to shoppers, the companies said.
Finnish elevator maker Kone Oyj already is using the combined AI service, IBM and Salesforce said. Kone uses Watson to monitor the status of its elevators, and uses Salesforce Service Cloud to provide customer-service functions. Combining the services could help Kone customers repair elevators more quickly, or even detect and resolve potential problems before they emerge.
“The real value is when you link these processes together, not just apply AI to an individual one,” IBM Chief Executive Ginni Rometty said.
IBM already had a relationship with Salesforce through Bluewolf Group, a consulting service specializing in Salesforce’s services IBM bought in 2016. That acquisition led to the AI partnership between the companies, Salesforce CEO Marc Benioff said.