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What the Einstein-Watson merger means for Salesforce and IBM

IBM is coming to Salesforce's aid, in a partnership to bolster the CRM giant's new AI Einstein bid with IBM's own Watson. Expert Scott Robinson takes a look at the partnership.

Last year kicked off the era of artificial intelligence in the cloud. This is shaping up to be the year of AI partnerships...

in the cloud, as Salesforce and IBM announced earlier this month that they're joining forces to combine the services of their two AI platforms, Einstein and Watson, respectively.

The partnership is a truly interesting notion, especially in light of the recent bad blood between Salesforce and Microsoft, whose Azure artificial intelligence (AI) service competes with Einstein and Watson. A months-long tease of a possible partnership between Salesforce CEO Marc Benioff and Microsoft CEO Satya Nadala dissipated in a cloud of suspicion, leaving Salesforce in need of an infusion of inspiration for its late-to-the-party AI entry.

Watson, oldest of the cloud AIs, and by far the one with the highest traffic, makes for a potentially substantive solution. Watson's user base and accumulated data are both vast. Einstein, highly ballyhooed at Dreamforce in San Francisco last fall, has promise, but is still in its sales support infancy.

Potential functional synergy aside, however, this merger is, first and foremost, a strategic move.

A tale of two AI platforms

The marketing approaches applied to the two AI platforms over the past year are very telling: Both Salesforce and IBM made the promotion of their AI products a strong expression of their corporate ideologies, as IBM touted Watson as a platform that could "think like a human," while Salesforce promoted Einstein as "AI for everyone."

IBM's need to humanize its once monolithic (and still highly corporate) facade has driven its marketing of Watson from the start, even in its sideshow victory on TV's Jeopardy five years ago. Even so, "think like a human," while well-intentioned, carries a whiff of 2001: A Space Odyssey's HAL 9000 -- and is shadowed by Watson's black box lack of transparency.

IBM touted Watson as a platform that could 'think like a human' while Salesforce promoted Einstein as 'AI for everyone.'

Einstein, on the other hand, got a warm welcome with its democratizing theme, out-humanizing Watson from the start with the promise that its presence in the enterprise is "like having your own data scientist." That, too, turned out to be hyperbole, as Einstein's inner workings are as opaque to the end user as Watson's, and Einstein can't come close to matching the problem-solving flexibility of even a freshly minted college graduate in business statistics.

Yes, these two need each other -- not only to straighten out their messages, but also to rapidly strengthen their market presence in the face of their more powerful and pervasive competitors.

They might be giants

Microsoft's autumn offering at Ignite in Atlanta -- its new Cognitive Services suite for the Azure AI platform -- is likewise an expression of institutional ideology. For a decade and a half now, Microsoft has been winning in a landslide with its highly modular, built-it-yourself philosophy, empowering businesses of all sizes to undertake data warehousing and business intelligence with much lower barriers to entry.

That strategy prevails today, as its baked-in AI features, deployed as out-of-the-box Azure services that integrate easily with more traditional business technologies (with APIs offered for more exotic applications), can do as much or more than Einstein or Watson -- as long as the user is willing to read a tutorial or two.

Oracle's Adaptive Intelligence Apps are likewise modular, configurable and much more toolkit-oriented, as opposed to the vending machine demeanor of Einstein and Watson.

The challenge in confronting the two giants at the head of the field is this: to deploy broad and highly configurable functionality that at least approaches theirs, with competitive automation capabilities and easy integration. It's still apples and oranges, but, then, the gap in potential outcomes will not be so wide.

The decision-making market emerges

The merger benefits IBM in the marketplace by putting its AI into the hands of any business that has a sales team. It broadens Salesforce's AI functionality in the face of Microsoft's stronger and more versatile platform. As part of the deal, IBM is making the Salesforce Service Cloud its in-house CRM platform -- giving Salesforce a headliner among its high-profile customers.

Salesforce and IBM already share 5,000 customers. When their combined platforms deploy in the third quarter of this year, the two companies won't share revenue, but will continue to sell their respective services independently. They will also both reach far more customers together than they could separately.

Moreover, they could potentially take up a leadership role in what IBM CEO Ginni Rometty has called the "decision-making market," a new branch of business IT that she predicts could be a $2 trillion market within 10 years. With IBM's recent announcement of its IBM Q division, which is gearing up to commercialize quantum computing, the company could potentially not only lead the market, but also win the ideology race.

Next Steps

Q&A: The Salesforce AI strategy

Salesforce and IBM CEOs: New training is needed for AI technology

Bluewolf responds to the new IBM and Salesforce partnership

This was last published in April 2017

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