The Future of Intelligent Transformation

Welcome to New York City. This is the 2nd year in a row we host our Transform event here because New York is indeed one of the most transformative cities in the world.

Last year, on this stage, I spoke about the fourth industrial revolution and our vision around Intelligent Transformation. How it would fundamentally change the nature of business and customer relationships, and why preparing for this transformation is the key for the future of a company.

And in the last year I can assure you we’ve been very busy doing just that.

From searching and bringing in global talents around the world to the way we think about every product and every investment we make.

I was here in New York just a month ago to announce our fiscal year Q1 earnings, which was a good day for us. I think now, the world believes it when we say Lenovo has truly turned the corner – to a new phase of growth and a new phase of acceleration in executing the transformation strategy.

What’s clear to me is that the last few years of purposeful disruption at Lenovo, have led us to a point where we can now claim leadership of the coming Intelligent Transformation.

What is Intelligent Transformation?

People often ask me – what is Intelligent Transformation?

I’ll say this: It’s the unlimited potential of the 4th industrial revolution – driven by A.I. - being realized. Ordering pizza through a speaker; unlocking the doors with “a look;” letting your car drive itself back to your home. These indeed reflect the power of A.I., but just the surface of it! The true impact of A.I. will not only make our homes smarter and offices more efficient, but will also completely transform every value chain in every industry.

However, to realize these amazing possibilities, we will need a structure built around the key components, and one that touches every part of our lives.

The Need for Structure

First of all, explosions in new technology always lead to new structures. This has happened many times before.

In the early 20th Century, dozens of companies provided telephone service. City streets across the U.S. looked like this. And now - bundles of microscopic fiber running from city to city - bringing the world closer together.

Here’s what driving was like in the U.S. up until the 1950s. Good luck finding your way! And today – millions of vehicles are organized and routed daily – making the world more efficient.

Structure is vital; from fiber cables and interstate highways, to how cells bond together to create humans.

The Structure of Intelligent Transformation

Thankfully, the structure for Intelligent Transformation has emerged and it is just as revolutionary. What does this new structure look like?

We believe there are three key building blocks: data, computing power, and algorithms.

Ever wondered - what is behind Intelligent Transformation? What is fueling this miracle of human possibility?

“Data.”

As internet becomes ubiquitous, not only PCs, mobile phones have come online and been generating data. Today it is the cameras in this room. The climate controls in our offices. Or the smart displays in our kitchens at home.

The number of smart devices worldwide will reach over 20 billion in 2020 – more than double the number in 2017.

These devices and sensors are connected and generating massive amounts of data. By 2020, the amount of data generated will be 57 times more than all the grains of sand on Earth. This data will not only make devices smarter, but will also fuel the intelligence of our homes, offices, and entire industries.

Then we need engines to turn this fuel into power, and that engine is the “computing power.”

Last, but not least, the advanced algorithms combined with Big Data technology and industry know-how will form vertical industrial intelligence and produce valuable insights for every value chain in every industry.

When these three building blocks all come together, it will change the world.

Our Model for Intelligent Transformation

At Lenovo, we have each of these elements of Intelligent Transformation in a single place. We have built our business around the new structure of Intelligent Transformation – especially with Mobile and Data Center now firmly part of our business.

I’m often asked: Why did you acquire these businesses? Why has Lenovo gone into so many fields?

People asked the same questions of the companies that became the leaders of the information technology revolution or the 3rd industrial transformation. They were the companies that saw the future and what the future required. And I believe Lenovo is that company today.

From the largest portfolio of devices in the world, leadership in the data center field, to the algorithm-powered intelligent vertical solutions. And not to mention the strong partnerships Lenovo has built over decades. We are the only company that can unify all these essential assets and deliver end-to-end solutions.

Let’s look at each part.

Data & the Ability to Scale

We now understand the importance data plays as fuel in Intelligent Transformation. Hundreds of billions of devices and Smart IoTs in the world are generating data and powering the Intelligence.

Who makes these devices in large volume and variety? Who puts these devices into people’s homes, offices, manufacturing lines, and in their hands? Lenovo definitely has the front row seat here!

We’re number one in PCs and tablets. We also produce smartphones, smart speakers, smart displays, AR/VR headsets as well as Commercial IoTs. All of these smart devices, or Smart IoTs will link to each other and to the cloud.

In fact, we have more than 20 manufacturing facilities in China, U.S., Brazil, Japan, India, Mexico, Germany and more, producing various devices around the clock. We make 4 devices every second and 37 motherboards per minute.

This factory, located in my hometown HeFei, is actually the largest laptop factory in the world with more than 3 million square feet. That is as big as 42 soccer-fields!

Our scale and large portfolio of devices gives us access to massive amounts of data – which very few companies can say.

Why is the ability to scale so critical? Let’s look again at our examples from before.

The early days of telephony (Tele-fo-ni) – dozens of service providers. But only a few companies could survive consolidation and became the leader.

The same was true for the third industrial revolution. Only a few companies could scale – only a few could survive to lead.

Now the building blocks of the next revolution are locking into place. The race will go to those who can operate at scale. So who could foresee the total integration of cloud, network, and device needed to deliver Intelligent Transformation? Lenovo is that company. We are ready to scale.

Computing Power to Drive Transformation

Next, our computing power. Computing power is provided in two ways. On one hand, the modern supercomputers are providing the brute-force to quickly analyze the massive data like never before. On the other hand, the cloud computing data centers with server, storage, networking capabilities, and edge computing IoTs, gateways and mini servers are making computing available everywhere.

Did you know - Lenovo is the number one provider of supercomputers worldwide? 117 of the top 500 supercomputers run on Lenovo. We hold 89 world records in key workloads. We’re number one in x86 server reliability for five years running, according to ITIC, a respected provider of industry research. We are also the fastest-growing provider of Hyperscale public cloud, hyper converged, and aggressively growing in edge computing.

Kirk will expand on this point soon.

Algorithms to Apply Transformation

And finally, to turn these individual notes into a symphony, we must transform the data and utilize the computing power with, advanced algorithms.

Manufacturing, industry maintenance, health care, education, retail and more. So many industries are on the edge of intelligent transformation to improve efficiency, and provide better products and services. We are creating advanced algorithms and Big Data tools, combined with industry know-how to provide intelligent vertical solutions for several industries.

In fact, we started at Lenovo first – Our IT and Research teams partnered with Global Supply Chain to develop A.I. that improved our demand forecasting accuracy.

Beyond managing our own supply chain, we have offered our deep learning supply forecast solution to other manufacturing companies to improve their efficiency. In the best case we have improved the demand forecast accuracy by 30 points to nearly 90% for BaoSteel, the largest steel manufacturer in China.

Led by Lenovo Research, we launched the industry leading, commercial-ready AR headset, DaystAR (day-star). Partnering with companies like the ones in this room, this technology is being used to revolutionize the way companies service utilities and even jet engines.

Using our workstations, servers, and award-winning image processing algorithms, we have partnered with hospitals to process complex CT scan data in minutes. This enables doctors to more successfully detect tumors and increases the success rate of cancer diagnosis all around the world.

We are also piloting a Smart IoT driven warehouse solution with one of the world’s largest retail companies to greatly improve their efficiency.

The opportunities are endless.

This is where Lenovo will truly shine – when we combine the industry know-how of our customers with our end-to-end technology offerings. Our intelligent vertical solutions like these are growing – which Kirk and Christian will share more.

Intelligent Transformation and 5G

Now what will drive this transformation even faster? The speed at which our networks operate, specifically, 5G.

You may know that Lenovo just launched the first-ever 5G smartphone, our Moto Z3 with the new 5G Moto Mod. We’re partnering with multiple major network providers like Verizon and China Mobile. With the 5G mod scheduled to ship early next year, we will be the first company to provide the 5G mobile experience to customers.

This is an amazing innovation – you don’t have to buy a new phone, just the 5G clip-on.

What can I say except – Wow!

5G is ten times faster than 4G. Its download speeds will transform how people engage with the world. Driverless cars, new types of smart wearables, gaming, home security, industrial intelligence – all will be transformed.

Partnership to Make Transformation Possible for All

Finally, accelerating with partners.

As ready as we are at Lenovo – we need partners to unlock our full potential. Partners to create with us the Age of Intelligent Transformation.

The opportunities of Intelligent Transformation are too profound, the scale is too vast. No company can drive it alone fully. We are eager to collaborate with all partners that can help bring our vision to life. We are dedicated to open partnerships. Dedicated to cross-border collaboration, unified standards, shared advantage, and market synergies.

We partner with the biggest names in the industry: Intel, AMD, Microsoft, Qualcomm, Google, Amazon and Disney. We also find and partner with the smaller innovators as well.

We believe in the “ultimate partner experience”– open, shared, collaborative, diverse.

Transformation Never Stops

Everything is in place for Intelligent Transformation on a global scale. Smart devices are everywhere. The infrastructure is in place. Networks are accelerating. And the industries demand to be more intelligent.

And Lenovo is at the center of it all! We’re helping to drive change with hundreds of companies – companies just like yours – every day. We are your partner for Intelligent Transformation.