IBM: Outcomputing Its Competitors

Earlier this week, IBM (NYSE: IBM  ) unveiled its latest and greatest supercomputer. The 91-teraflop monster, dubbed "Watson Blue Gene," is capable of cranking out a mind-blowing 91 trillion calculations per second. This ultra-powerful -- yet remarkably affordable, practical, and accessible -- computing tool is likely to give IBM a significant competitive advantage over competitors such as Affymetrix (Nasdaq: AFFX  ) , Intel (Nasdaq: INTC  ) , and General Electric (NYSE: GE  ) in the life sciences, information technology, and material sciences sectors.

The first area where the new computer will prove useful is in modeling how proteins fold. A number of illnesses, including Alzheimer's disease, Parkinson's disease, cystic fibrosis, mad-cow disease, and sickle-cell anemia, are all thought to be related to improperly folding proteins. It's expected that by better understanding the processes through which these diseases occur, IBM researchers will find new and better ways to treat them. Ultimately, the researchers hope to prevent the diseases from ever occurring. What it means for IBM is that the company could become not just a bigger player in the life sciences sector but quite possibly the dominant one.

But the supercomputer's utility is by no means limited to examining protein folding. Its raw processing power can be applied to any field or discipline that requires massive crunching power, including financial risk modeling, climate modeling, seismic exploration, and automotive design, to name just a few. As a result of this explosion of new data and information, IBM's consulting business is likely to reap a lot of new contracts from companies hoping to profit from the new findings.

The computer should also strengthen IBM's already strong position in the burgeoning field of nanotechnology. By reducing the time it takes to run simulations from months or weeks down to mere days or hours, Watson Blue Gene holds the potential to exponentially increase our understanding of the complex fields of materials sciences, quantum chemistry, and molecular and fluid dynamics. Furthermore, because the computer is interactive, researchers will be able to make adjustments on the fly, and that should speed up the time it takes to translate scientific discoveries into viable commercial products.

In addition to being super-fast, Watson Blue Gene is also scalable. The benefits derived from it -- and its successors -- will only grow in the years ahead. In fact, IBM officials are confident that they'll be able to develop a successor capable of a 1 petaflop performance level by the end of the decade. That's 1 quadrillion calculations per second -- 10 times as powerful as Watson Blue Gene.

But the biggest reason Watson Blue Gene is so important is that it will give IBM the opportunity to use the knowledge it gleans to develop new products and create better and more practical solutions. And it's these new products and solutions that will give Big Blue a decided advantage in the years ahead -- it will allow the company to outcompete and outcompute its competitors.

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Jack Uldrich has been accused by teachers and friends alike of thinking small since grade school. He is the author of The Next Big Thing Is Really Small: How Nanotechnology Will Change the Future of Your Business. He owns shares of IBM. The Fool has a disclosure policy.


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