Hans Dekkers, General Manager, IBM Asia Pacific, outlines the region’s role as a growth engine, the rising focus on digital sovereignty, and the need for domain-specific small language models in enterprises.
Edited Excerpts:
How does IBM view APAC? Are these among your fastest-growing markets globally, driven by untapped regional opportunity?
IBM is doing well in the Asia Pacific (APAC) for many reasons. First, the market is growing. Every country in our remit is growing fast, India included. APAC accounts for roughly 60 per cent of global GDP growth.
Second, it’s in tune with the recent technological developments. IBM is a big believer in open source, open platforms, and a large part of the competence in APAC is open-source driven. The sheer response to global disruptions drives many discussions around sovereignty, localisation, and AI. These discussions are up in the priorities of the APAC countries.
We are seeing huge demand for sovereignty solutions in the region and are going to market with many new partnerships. Airtel was one of them. It’s a multi-billion-dollar market opportunity for both companies. It brings enterprise-grade, specialised cloud capability to India. For Indian companies and the government, if you want local, this is where you can deploy it; it’s a localised solution for all of our Indian enterprises.
India is also growing fast since it has the right demographics and is always hungry to learn. IBM has invested dramatically in India and will continue to. It hosts our software labs and development centers, which handle global missions.
What is driving the global push behind digital sovereignty and data residency?
Sovereignty, in essence, is autonomy. It’s about whether your data is yours , if the technical operating plane of your business is secured and autonomous, if the activity is auditable, and if you can comply to local legislation. Sovereignty for us is over-encompassing. That’s what we’re focused on.
This presents a lucrative business opportunity for us and everyone else. One of the driving forces is that many of our clients are realising, especially when it comes to AI, that they need to be in control of their data and models. They don’t want to give away data to someone else or a broader platform. The enterprises have to make sure that their and their clients’ intellectual property is protected and governed. This is what we bring to the market.
Beyond sovereignty, what key cloud trends have emerged across APAC in recent years?
The recent trend, driven by sovereignty and also by price and cost, is a huge movement of on-prem again. One is a version of the traditional on-prem, where clients are buying more compute for themselves. But also adjacent local service providers are buying compute for local companies. There is a movement of workloads that used to be on hyperscaler clouds, back on-prem due to sovereignty, AI, cost, and controllability.
While the regulated industries are interested in this offer, so are the smaller enterprises — the up-and-coming start-ups that need technology that can scale. This offering gives them an edge versus just jumping onto any infrastructure they can grab.
Given the conflict in West Asia, is there a concern that some companies may temporarily pull back on software spending to manage costs?
AI is embraced everywhere; it is changing how we look at our business processes and how we accelerate growth. The companies that will outlast the rest are those implementing AI in the right and fastest way. They use it as an accelerator.
Companies that are not embracing AI yet are struggling. We’re helping them get to this new state of technology. It’s happening in different pockets, with some grasping the benefits already. Every sector will see a great impact of this technology. While it will cause some disruption, it is natural and good for us all.
What are some of the biggest growth opportunities for IBM? Specifically, in the Asia-Pacific region, whether it’s with AI or cloud adoption, anything?
IBM is focused on three transformational technologies — Hybrid Cloud, AI, and Quantum. There is a huge opportunity in all three because they touch the heart of what clients are struggling with. With everything happening globally, there is a huge demand for these technologies.
IBM has a unique and proper way of implementing technology. For example, we partner with many hyperscalers, but don’t have a hyperscaler cloud, which means we’re always on the client’s side. Wherever the client wants to run their infrastructures and data is where we can help them morph into.
We can optimise the client based on the situation and where we feel it’s best. So, huge opportunities in hybrid cloud. Moreover, the realisation of the journey to the cloud and the end state may not be optimal for all clients. So, hybrid is the new landing spot. Sovereignty and cost will drive more to an on-prem position.
AI will be a big opportunity, and we’re seeing the first benefits. In the world, there will be room for 10 to 12 large language models (LLMs) trained on available data. They need huge data centres to compute and are relatively inaccurate. They’re not trained on enterprise data for the right reasons.
IBM believes that the future is not just LLMs, but small, domain-specific, accurate AI models. Every enterprise, small or big, will have a multitude of small, domain-specific, highly accurate AI models, tied together through an agentic control plane. The agents can work with all of these small, domain-specific AI models. You can train them fast without massive data centres because they’re relatively small.
The third benefit is that these models are local. They’re yours as an enterprise or as a government. You don’t want an AI model owned by someone else because it’s your data, model, and intellectual property.