IBM and OpenAI hope their partnership is the beginning of a beautiful friendship

You don't get much more enterprise old school than IBM's consulting division working with companies to roll out complex software (while jacking up the price of a process that's already expensive).

OpenAI and IBM announced a partnership this week where IBM plans to launch a dedicated OpenAI Practice with "thousands of consultants and engineers." With this move, OpenAI now effectively has Big Blue serving as a piece of its forward-deployed engineering division. You may recall that OpenAI announced the OpenAI Deployment Company in May to help companies as they implement OpenAI solutions, an admission of the complexity involved in such deployments.

At IBM Think in May, CEO Arvind Krishna talked about the challenges companies face when implementing AI. "They don't fail because of the AI [technology]. They often fail because of what's underneath: siloed data, fragmented infrastructure, multiple clouds with no coherent operating models. The models don't really matter unless the foundation is correct," Krishna said in the keynote.

IBM plans to concentrate on several main areas including transforming legacy workflows, application modernization and cybersecurity, all areas where large companies recognize the power of AI, but struggle to implement solutions at scale.

While it's a no-brainer kind of partnership announcement (why wouldn't they partner?), it's still a good move for both sides. After a disastrous earnings report, IBM is signaling its consulting arm, which was flat last quarter, may have some life left in it.

Holger Mueller, an analyst at Constellation Research, who watches IBM closely, says it's a triple win. "It's a win for customers as they need help to implement AI successfully, a win for OpenAI, as it needs to move to the enterprise and does not want to build up the services for that (as they are margin dilutive) and a win for IBM, which needs to create consultant revenue potential and direct revenues," Mueller told FastForward.

Maribel Lopez, founder and principal analyst at Lopez Research, agrees, but says it has to be part of a broader partnership program, especially for enterprise customers, who will be worried about security in the face of recent highly publicized incidents from the AI labs themselves. "It makes sense for OpenAI to work with IBM Consulting who has a strong security practice, but OpenAI will also need to work with all of the major integrators over time," she said.

It's worth pointing out that this isn't the first such partnership. Last October, the company announced a similar agreement with Anthropic.

As any sports fan knows, anything can look good on paper the first day, and these are two companies with some issues at the moment, but it could be a good deal for both organizations if they don't find a way to screw it up.

Editors Note: This article originally appeared in News of the Week in FastForward #75, but I've added some additional context.