Our next session at Citi's TMT Conference. I'm Ryan Potter from Citi Research, just as a reminder. This is for Citi clients only. For this session, I'm glad to be hosting IBM, and from IBM we have Kelly Chambliss, SVP of IBM Consulting Americas. Kelly, thanks for doing this. Thank you. Happy to be here, Ryan. Yeah. You've had a lengthy career now with IBM, and you're currently leading the consulting in Americas, as I just mentioned. Can you share with everybody your background in the business you're running today? Sure, absolutely. Let me start with IBM Consulting. We're a pretty large and material player in the consulting space and also a really big part of IBM. We are about 160,000 people inside IBM Consulting and represent about a third of IBM's overall revenue and two-thirds of IBM's people or employees. Big part of the market, but also a big part of IBM. As you mentioned, Ryan, I lead IBM Consulting in the Americas. I'm focused, and probably all of you know what IBM Consulting does, but everything from strategy advisory work through technical implementations, often in partnership with IBM Tech as well as other strategic partners. We also do operations, think application support and management, but also business process outsourcing. Americas role includes Latin America, U.S. and Canada. Currently leading IBM Consulting in the Americas. Prior to this, I was the Global Chief Operating Officer for IBM Consulting, responsible for execution of our strategy, responsible for M&A, assets offerings, our global delivery centers and network around the world. Prior to that, I also served as the Chief Technology Officer for IBM Consulting. Again, focused on offerings and assets, but also led our business with IBM Technology, IBM Software in that role. It's a great time. I've always loved working at the intersection of business and technology. I came into IBM actually through the PwC consulting acquisition. I started my career there as a technologist, I was a developer architect and just have always loved working at that intersection of business and technology. Obviously came into IBM through the acquisition and have been here ever since. I think it's a really exciting time to work in a tech company and specifically IBM. Great. Speaking of technologists, there's a career technologist leading IBM now in Arvind. Maybe you could touch on some of the changes he's made to IBM as a whole and consulting in terms of strategic direction, I guess go to market. Anything you can comment in terms of changes under Arvind. Happy to. I think the biggest thing is just clarity and consistency of the strategy and our focus since Arvind has stepped into the CEO role. We're all about helping enterprises transform using hybrid cloud and AI and then other supporting technologies, whether it be security, automation. That clarity and consistency where whether you're in IBM Software, IBM Infrastructure, Consulting, everybody's focused on helping our clients leverage the preeminent technologies of our time, hybrid cloud and AI, to transform their businesses, help their businesses run better. That clarity and consistency of the strategy across the company is one thing that comes to mind for me as a shift. I'd say there's probably a few other things. One is greater focus, kind of in alignment with that strategy. I think many of you are probably aware, in an effort to focus around hybrid cloud and AI, infrastructure services was spun out and created a separate company, Kyndryl. Some of the Watson Health assets were divested. With focus came greater simplification, and Arvind's really focused on simplifying for speed, right? We can react to changes in the market but also client needs. Focus and simplification come to mind. The third change I would say, or shift, during Arvind's leadership has been to a more open company. I mean, it really started with the acquisition of Red Hat, which is obviously one of the leading open source product portfolios. Red Hat by nature then works with a lot of other tech companies, and that drove all of us being even more focused on leveraging the ecosystem. We don't believe that any one company has all the technology required to transform and run our clients' businesses. A lot of partnering, very open. You'll see that even some of our recent AI Granite models were released as open source. It's just another example of how we leverage the broader ecosystem and really believe in being an open tech company. Got it. Consulting also just recently made a leadership change with Mohamad Ali taking over. Maybe you could touch on what he brings to the table and if you foresee any strategic changes going forward or just more of a continuation of Arvind's strategy we've seen in recent years. Yeah, good question. Mohamad stepped into leading IBM Consulting globally a couple months ago. It's a pretty recent change, and he obviously has a really strong track record of executing on strategies both inside IBM and outside IBM. He actually spent some time earlier in his career in IBM Software, then recently returned to IBM as the Consulting chief operating officer before moving into the overall leadership role. So far, very focused on building on the foundation that John Granger and Mark Foster before him had laid. Also bringing that software knowledge, expertise, experience in terms of shifting IBM to consulting to being even more assets led. That's going to be a really important shift that we'll make, and I'll talk a little bit more about it today as it relates to AI really giving us new capabilities and ways to differentiate in consulting. I think his software background will help us probably accelerate that shift to being a more asset-based consulting organization. Got it. Yeah, we'll touch on the software stuff a little bit later, I guess kind of shifting to demand. IBM has characterized demand environment as strong for technology transformations. We've heard that from some peers in the market as well. I guess, what are you hearing from clients today that's driving that kind of core transformation demand? Then just in terms of how are clients reacting to the continuing macro uncertainty? What are you seeing in discretionary spending? Just elements like that. Okay. I always think when we talk demand, it's probably good to start with just overall size of the market. The market that IBM Consulting operates in is about $800 billion a year, growing at mid-single digits. Kind of speaks to the points about consistent solid demand for transformations, which is really in large part driven by a lot of companies, obviously, are looking to leverage technology to not just drive productivity, establish competitive advantage and differentiate and make sure that they're the disruptor, not the one being disrupted, right? Technology is playing such a critical role to all of our clients' businesses. That's driving a lot of that demand. When you look at the transformation side of it, I really think of it as there's been two waves of digital transformations. The first wave was really powered by and driven by hybrid cloud, the second wave, that's just really starting, is driven by the combination of hybrid cloud and AI. Kind of think of it as digital transformation 2.0. A lot of companies are looking to figure out, okay, not just the benefits and value of shifting to the cloud and leveraging hybrid cloud environments, but how can AI really further drive productivity, but also top-line growth as well, new products, new services. I think a lot of the demand for transformation is driven by that intersection of cloud and AI, and that's a space in our market that's growing faster than the rest of the market. When you talk about just demand outlook and what we've seen in the first half of the year, I think Jim and others mentioned this earlier in the year, but from starting around Q1, we saw kind of a little bit more of a dynamic environment as it related to clients investing in less strategic areas, I would call it. A lot of it was to free up money to be able to invest in the areas that were most strategic. There is a little bit of a shift going on and a little bit more of a dynamic environment in what I would call that discretionary spend. One of our big areas of focus is helping our clients prioritize, strategize, figure out what should move to the cloud, where can you best leverage AI, and how to really minimize the cost to run some of their existing technology. We have a lot of clients talking about tech debt. We really get in early, and you'll see that with some of our early AI wins and signings. We get in early and help them figure out what should I move to the cloud, what should I invest in, what should I de-invest in? Being a trusted partner right at the center of that is really important as we go forward, given solid spend on the transformation side and a little bit more dynamic on the discretionary side. Yeah. On the discretionary side, what would it take for that market to open up a little bit more in terms of enterprises spending? Is it more clarity on interest rates, more sustainability of interest rates actually coming down, getting past election cycles? Just all of the above there. I was going to say, as you were adding, I would say all of the above, because when I think about what's driving a lot of the technology spend today, it's data management, because you can't really leverage AI without investing in your data platforms and infrastructure. It's inflation. Technology can be deflationary in some areas. It's skill shortages in some areas. Automation and AI can help with that. I think it's a combination of all of the above, but I think as companies use technology to become more productive, that frees up cash flow to invest in those transformations too. Got it. Maybe we could touch a little bit on visibility, because the consulting outlook has moved a little bit as we move through the year, and because of that discretionary element you just highlighted. Can you just touch on the visibility we have into the consulting business? I don't know if you can talk about contract durations or anything like that. Just in terms of the current outlook, just the wider assumptions that are embedded into that consulting outlook. Yeah. Well, through the first half of the year, our most recent quarter, Q2, we grew 2%. I mentioned the broader market is in the low to mid-single digits. We grew 2% in the most recent. Our book-to-bill, so signings to revenue is, I think, trailing 12 months about 1.15. Seeing again, as I mentioned, demand for those transformational capabilities, investments in technology. The market, like I said, is growing mid-single digits, and through the first half, we were almost in line with that and 2% coming out of the second quarter. Okay. In terms of macro, I guess, is there any assumptions for bill think through in terms of second half of the year, or are you assuming kind of more of the same at this point? No assumptions, and I don't have any reason to believe. Okay Any outlooks we've given would change at this time. Okay. I guess just moving forward, just looking at high level of IBM Consulting and overall market in general, what would you say kind of differentiates consulting most versus some of the peers in the market? Yeah. Thank you for asking that question. This is one of my favorites because there are a lot of other consulting firms, and at scale, we're the only one at scale inside a major tech company, right? I love the question about what makes you different, what makes you unique and special. I'd say that really three things. First is the integrated IBM value proposition. As I mentioned, we're the only large consultancy or scale consultancy inside a tech company, and that provides benefits for IBM as a whole, but also to our consulting business. For IBM as a whole, as an example, a lot of the work we do, we have a whole practice around mainframe modernization. As we help clients figure out what workloads to move to the mainframe, how to optimize that, it creates sustainability for IBM in that platform. Same thing when either of us, consulting or technology, makes acquisitions. There's synergy going both ways. The best probably story or kind of proof points of that is Red Hat and the size of the business we built inside consulting with Red Hat. As technology makes other acquisitions like I look at Instana, Turbonomic, Apptio, some of the FinOps and optimization products, there's some synergistic effect for consulting. That goes the other way as well when we make acquisitions in consulting. I'd say that integrated IBM value proposition is one of the greatest differentiators for IBM Consulting. I'd say the second one, a lot of focus on this in the press from IBM is our investment in strategic partnerships. As I said earlier, no one technology company can run entire enterprises, help them transform, and deliver the productivity benefits that they're expecting. We partner a lot, whether it be with SAP, Salesforce, Oracle, Adobe, Microsoft Azure, AWS. Very focused on not just partnering with them, but one of the things that differentiates us is the depth of technical expertise we build. Being part of IBM and always having been known for innovation and depth of technical expertise and prowess, that translates over to heavy focus on certifications and really being the people that can make that partner technology work and deliver value quickly. Last but not least, one of the unique things that we probably don't talk about enough in IBM Consulting or about IBM Consulting is how we work. I think some of you may have heard in the past, we have an approach to doing work with all of our clients across all of our offerings and capabilities called IBM Garage, and it really gives you the best of both worlds in terms of harnessing the power of our clients' talent, institutional knowledge, process knowledge with our domain industry technical knowledge to operate in a really creative, agile way to deliver value faster. The IBM Garage method has this approach inherent in it that's all about ROI, helping clients figure out what to prioritize next. It's a really innovative way of working that clients have really embraced and recognized as a differentiator. Our NPS scores when we are using the IBM Garage way of working with our clients is 79, which I think is in the world-class range. That unique way of working and delivering value with clients, at greater speed is a differentiator. One of the things we've added recently, with the emergence of AI, we see AI not just as an opportunity to build AI-enabled solutions for and with clients, but to use it to be more productive in how we deliver solutions to clients. We launched a platform called IBM Consulting Advantage, and it's a platform that has assets, accelerators, assistants that help all of our consultants be more productive. If you're a consultant working on an SAP program and you sit down to write a design spec, it's a lot faster than it used to be because there's these AI assistants that help you do your job. Everything from design specs to test cases, everything. Think of it as digital labor inside this platform that makes all of our consultants more productive. When we couple this IBM Garage way of working with that IBM Consulting Advantage kind of services platform, it is really, really powerful and can be a differentiator as well. Yeah, that's great. Maybe double-clicking on the strategic partnerships element. I know consulting over 40%, or I think up to 40% of revenue comes from strategic partnerships currently, and that's been worked that way up over recent years. Maybe if you could dive into what you've done to work up that piece of revenue. Is it just getting more certifications with these partners? Is it working on more joint go-to-market strategies with these partners? Going forward, is the opportunity to keep pushing that beyond 40%? Yeah, absolutely. You're right. It is about 40% of our business today, and we do see it as a big growth opportunity as clients, as we were talking about earlier, with digital transformations, moving more of their capabilities to these platforms. We see there continuing to be a lot of opportunity to team with strategic partners to drive growth. We created, a couple of years ago, an entire organization focused on our strategic partners, and that's everything from really driving certification, that technical depth of expertise that I talked about earlier, to joint assets and accelerators as well. Inside this Consulting Advantage platform that I talked about, some of the assets and accelerators are with strategic partners. For example, we have an asset that is targeted at counties and states that helps them share data across agencies. That was built on top of Salesforce. We have industry templates and assets around SAP, and those are in this platform as well, so we can accelerate the time to value for clients with the partners. You've probably seen quite a few press releases from us lately too in the AI space, right? Teaming a lot with our partners around AI. For the application providers like SAP, Oracle, Adobe, Salesforce, they're embedding AI, sometimes AI from IBM, like Salesforce is using some of the Granite models. They're embedding AI in their solutions. Also, a lot of the investments being made on the public clouds, like Azure, AWS, they're looking to build AI on top of that capability. We're partnering with them a lot in that space. It's interesting, if you look back just five years or so ago, our businesses with Microsoft Azure and with AWS were very small, and they're now both over $1 billion. That focus and investment, and a lot of it driven by investments in accelerators and assets, is really starting to yield growth as you highlighted. There's opportunities with other partners to that billion-dollar level over time. I know Arvind and Jen have mentioned that as well too. Exactly. We have SAP, Microsoft Azure, and AWS that are over $1 billion today. The focus is getting more into that club. Great. You touched on IBM Garages earlier, maybe we could touch on kind of industry focus. I know in recent years you focused on also experiential selling and kind of pivoting your go-to-market. Can you just comment on how the go-to-market has evolved and how the experiential selling has actually maybe helped elevate kind of demand you're seeing in flowing? Yeah, absolutely. We go to market by industry. All of our consultants have both a specialty, and it could be data and AI, it could be hybrid cloud transformation, then they also have an industry that they're building depth and expertise on. Because as we implement transformations for our clients. It's important for our consultants to really understand the industry that they work in. A lot of focus on industry talent, expertise. You see, we publish a lot of thought leadership around industry, then as I mentioned, some of our assets as well are industry-focused. We have assets around payments, in the telco networking space. I mentioned the one that counties and states for data sharing. A lot of the asset development we do is very industry-focused. You touched on a really important point about experiential, not just selling, but just entire engagement model being more experiential. Garage does that in the delivery, as I talked about. In the sales process, it is really, really rare that we aren't building a proof of concept or a pilot as part of a sales process because we're all living and working in a show me versus tell me world, right? A lot of focus, and most of our consultants roll up their sleeves side by side with clients and build out proof of concepts and pilots as part of the sales process. That also makes for a more natural, seamless transition to delivery and kind of closes any potential expectation gap we might have had in the past when we were sharing documents as opposed to being able to look, feel, touch the technology, then it gives them greater confidence to move forward with us. Got it. I guess maybe shifting gears towards everyone's favorite topic, GenAI and AI broadly. You mentioned one of IBM Consulting's differentiation is technology, leveraging IBM's technology. You touched on AI earlier, but could you dive into, I guess, a little bit of maybe examples of how IBM is helping clients leverage AI and GenAI broadly today? Yeah, absolutely. Again, I'll go back to size and scale of the market to start. I talked about how the consulting space is $800 billion a year, roughly, right? Growing mid-single digits. It's projected that by 2027, the AI services market will be close to 100. I think the number I saw was $99 billion. You think about, in a pretty short amount of time, it's rapidly not just out there as potential, but clients will realize value from it, and there will be a big services opportunity for us as well. One of the things that we're seeing in the market is, it's been a little while now since everyone's been talking about GenAI, right? Wanting kind of faster proof points, accelerated value from AI. I would summarize, Brian, kind of four areas where we're seeing clients actually get material value from AI today. We're doing a lot of other work. You saw some of our recent in Q2 signings and win numbers around AI. When I take a step back and just say, where are clients today realizing material value from AI? There's four key areas. One is customer service, two is application development, three is security. Probably no surprise with all of the attacks. I think what, almost 50% of companies in our latest security reports have had some kind of cyber attack in the last year. Fourth is IT ops, just running technology operations and having that not be as labor-intensive as it was in the past. You asked for examples. In the customer service space, which is where we're seeing the greatest uptake in terms of not just broad adoption, but real value realized from AI. An example for a telco client, we within weeks stood up an AI assistant to handle more of the customer interactions in a digital way, and it reduced call wait times by 30%. We're not talking about months and years of implementation time. Solutions in that space, AI generated or AI led customer service solutions can often be stood up in weeks. At scale for a large healthcare provider, we've actually digitized and our calls handled by AI is in the millions per year. Took not just a lot of cost out of their business, but it improved the customer experience as well. That's one of the great things about AI in the customer service space is almost always the satisfaction levels go up as well. They're able to handle large volumes at scale, but in a way that the customer wants to continue to interact with the brand and the company. Those same use cases that are delivering real value in customer service are also starting to deliver real value in employee service. A lot of companies are adopting almost very similar solutions for employee self-service. Same thing, takes out a lot of administrative time and frees up people to do higher value work. It makes the company more productive. At the same time, I've experienced this myself at IBM, it's as good, if not better experience for the individual as well. Customer experience and employee experience really high on the list in terms of real value being realized today. I talked a little bit about application development as well with some of our own tools on the IBM Consulting Advantage platform. Combined with some of our partner tools too, like Microsoft Copilot, we're seeing time to develop code being 30% less in some cases. We've got a couple of clients where we've migrated code as well from one language to another in 30% plus less time than it would take in the past. Customer service, application development, IT operations, and security are four areas that real value is being realized by clients today using AI. Got it. I know on the last earnings call, it was mentioned that IBM's done $2 billion of bookings of GenAI since kind of the rise of GenAI. You guys have released watsonx as a platform. Yeah. Three quarters of that, Lou, has been in IBM Consulting- Correct from run. Has that three-quarters of that $2 billion been largely in those four areas you talked about? Just in terms of, I guess, maturity of projects, is it still more kind of experimentation type stuff with the concept, or are you seeing stuff actually move to the more production stages yet? Good question. Of that, to date, a large portion of it is in those four areas, but there's also a portion of it that is doing proof of concepts and pilots as clients are wanting to test out and see what the potential could be. That will give us an ongoing funnel and pipeline of new opportunities as we prove out the Technology with clients. A lot of focus, and we've got teams from across IBM, both Technology and Consulting, working to do those POCs and pilots with clients so they can test it out. Because there's a lot of industry-specific use cases that don't fall into the four categories I just talked about, that our clients are anxious to get value from. One we're seeing a lot of interest and focus in is regulatory requirements and compliance, which can tend to be very costly and labor-intensive inside clients like banks. A lot of proof of concepts going on in areas like that. Yeah. Maybe you could dive a little more into, you talked about Consulting Advantage multiple times, but just in terms of day-to-day, how it could help the average consultant. Is it more just making them more productive, making the work they do potentially more accurate as well? Does it potentially also reduce the, I guess, amount of consultants you need on a project? Is it more just it can lead into a quicker inflow of projects coming in, as well as they're being more productive on the projects they're working on? Good question. I'll go back to a question you asked me earlier, Ryan, about differentiation, and that I saw AI as a big opportunity to differentiate. When we're proposing to a client, for example, to implement SAP, do an SAP-enabled transformation, we've set a goal for ourselves to say, "Okay, how can we take what used to-- however many hours an SAP implementation used to take, how do we do that in 30% less hours?" We've literally worked through the entire end-to-end life cycle. We've done this across a number of our offerings, just using SAP as an example, and gone through and said, "Okay, how could AI make us productive enough to do that for 30% less time and hours, a lapsed duration so the client gets value faster?" As we're doing that for each of our offerings, we're putting these assets and accelerators into the platform. When you're a consultant on the project, as I was describing earlier, you sit down to write a design spec or create a test case. You go into IBM Consulting Advantage, and you use those assistants that we've built, and then will continue to mature over time, to just do the work that you do in a faster, more efficient way. We see that as a competitive differentiator and gives us the ability to win more work, but also deliver client value faster, which then can be a catalyst for additional opportunities. Got it. In terms of the focus on partnerships, strategic partnerships, does it change at all with GenAI? Is it kind of lessons learned with hyperscalers you also apply into how you're building up GenAI partnerships, whether it be IBM Consulting Advantage or any other ways you're deploying GenAI? Yeah, good question. IBM Technology has the watsonx platform, but each of the public cloud providers also have capabilities around AI. We're really building deep skill capabilities, certifications in all of the leading platforms. A big focus is on accelerators and assets. We sit down and talk with our cloud partners. That industry lens is where they look to us to team and bring that expertise so that they can go to market faster as well with assets that can deliver value to clients faster. A lot of focus on partnerships that relates to leveraging AI. The application providers as well, whether it be Salesforce, SAP, Oracle, they're embedding AI in their solutions, but they love what we're doing around IBM Consulting Advantage because clients can get value from their platforms more quickly. We spend a lot of time with them as well about exchanging ideas and collaborating on what we can put into the platform that would help them sell their products and deliver value to clients faster, too. A lot of collaboration within the asset base that we're building. Got it. Staying on time on AI, I know since Arvind's come, the focus has been on AI, but hybrid cloud as well. Hybrid cloud is arguably the bigger piece of revenue, what you've taken advantage of in recent years. Maybe if you could dive in a little more into consulting's role with hybrid cloud, like what have been client pain points in terms of migrating to the cloud? What any know we had in terms of client adoption of the cloud, and I guess what's the opportunity going forward with consulting and hybrid cloud? Okay. I'd start by saying that there's probably very, very few large enterprises that hybrid cloud isn't the right answer. Like moving everything to public cloud, in most cases, won't make sense. It could be due to data gravity, just the amount of data that sits elsewhere and the challenges around moving that. It could be security and just even cost benefit. When you ask about the work we do around hybrid cloud, it all starts with, we have a hybrid-by-design offering and methodology to help clients figure out what should sit in which environments, but that's always a point in time. We've also built assets and accelerators to help clients kind of monitor over time, would it make sense to move this to the cloud? Really being an advisor as well as people who can then execute on that strategy. I think some of you probably saw, we did a study with McKinsey two or three years ago, the conclusion was that there's 2.5 times more value to use hybrid cloud than just 100% public cloud. The challenge then is, okay, how and in what situations do I use what environment for which workloads? A lot of the work we do is helping clients think through that and then execute on it. As a platform-centric company. One of the big benefits to our acquisition to Red Hat and our practice around Red Hat is we help clients architect their solutions so they can move it across clouds and across environments. They're not locked into any one environment over time. That's why there's been a huge amount of focus in IBM Consulting on not just building the Red Hat capabilities, but having the skills to advise clients on when to move different workloads to different places and monitoring that over time. We have a whole FinOps practice to help clients figure out, okay, maybe now is the time to move, and here's why, and how to be very data-driven. Got it. I guess we're shifting to productivity a little bit. We can talk about two sides of it, the demand side and also what you guys are doing internally. From the demand side, with clients focused on cost efficiencies and savings, I guess how does IBM place to help clients on that path? Historically, would you say IBM has better capabilities than maybe some other providers in terms of helping clients on that cost efficiency path? Yeah. You've heard Arvind and Jim and others talk about this, but we as a company are very focused inside IBM at becoming a lot more productive. You've started to see some of the benefits of this in our results in the first half of the year and starting last year. One of the things and benefits we get from that in IBM Consulting is we call IBM client zero, because we're working with IBM to drive those productivity benefits, and then we can, in turn, go help clients do the same. That's been a really powerful story for us because we've done it to ourselves first, and it kind of proved it out and seen what worked and what didn't work, and then being able to take those learnings from being client zero to clients, I think gives us an advantage in the driving productivity and cost savings piece, combined with our AI technology. I talked about we applied some of the employee self-service AI capabilities to ourselves in IBM. That was 50,000 hours saved in a year that could be freed up to do higher value activities, but also improve free cash flow and bottom line. Being able to go share those stories with clients and then help them leverage that same technology that we built for ourselves, I think has put us in a good position as it relates to driving cost efficiencies, productivity. Got it. I look at consulting margins, though, they lag what you might see in some of the peers. Maybe you could touch on why we believe margins are lower than some peers and maybe the flow through how consulting can lead into maybe higher margin opportunities in software and some other parts of IBM that you're willing to accept lower margins. Okay. Yeah. We saw over the last year or so in consulting our ability to drive margins up some. More work to do, as you called out. That was really for two reasons. One is, little bit of pricing leverage as a result of our investments in deeper skills. Clients are demanding depth of expertise, especially technical expertise. There's a shortage in the markets of some of those skills. As we've invested in deeper skills and specialization, we get some pricing leverage from that. We're also focused in consulting as we are across all of IBM on productivity. Productivity for us in consulting, labor mix, locations, utilization, how we deliver. This is where consulting advantage and some of the accelerators I talked about come into play. A lot of focus on going on continuing to be more productive, but there is also synergistic impact of having consulting inside IBM Tech and a dollar in the platform does drive multiple dollars of services back as well. That should make an impact, too. Got it. We are shifting over to M&A. Most of the M&A recently has been more directed towards the software side of IBM. But maybe you could tell us a little bit about IBM and IBM Consulting's- Yeah specifically approach to M&A and appetite broadly for larger deals. Absolutely. Our acquisition strategy, as you would expect in IBM as a whole, is very focused on hybrid cloud and AI, in alignment with our strategy. Sometimes you'll see on the software side some acquisitions around complementary areas, I would call it, like automation, like security. That's true on the consulting side as well. Most of our acquisitions obviously are underpinned by our strategic focus on hybrid cloud and AI, but they really fall into three categories on the services side: industry, strategic partnerships, and then cloud and AI. We've actually made 15 acquisitions in consulting over the last few years. When you look at them, three or four were in the hybrid cloud space and building some partner capabilities, like with Neudesic, with Microsoft, as an example. Quite a few of them were strategic partnership skills capabilities. That depth of expertise that I talked about earlier, Salesforce, SAP, Adobe, were some of the areas we made acquisitions. Also, you asked earlier, Ryan, about industry depth and expertise. We've also acquired a couple of companies in the government space, one in the U.S., Octo, and then one in the U.K. with specialist skills around the defense industry. You'll see most of our acquisitions in consulting, not only all focused on building on our hybrid cloud and AI strategy, but deepening our industry expertise and our strategic partner skills and capabilities as well. Got it. Anything you can call out in terms of the current state of the M&A pipeline in terms of consulting, in terms of what's out there and for capabilities anybody would be interested in? Also from a valuation standpoint, do I see any disconnect between public and private valuations at all? Probably can't comment too much on that other than to say that we ask ourselves kind of three questions. Does it align with the strategy? Is it accretive in a reasonable amount of time? Is it synergistic? A lot of the opportunities that we look at in consulting, we also think about how will this help drive benefit on the technology side as well, and they do the same. Got it. Helps the IBM platform as a whole, broadly. Exactly. Got you. Yeah. That integrated IBM value proposition that I talked about up front. Got it. I guess I can wrap all up with one last question in terms of what we're most focused on in terms of the key to continued success of IBM Consulting and what we can look for in the next couple of years. Based on what I've said so far, Ryan, it won't surprise you that I'd say there's four things that are really key to sustained and continued success going forward. One, I'll start with strategic partnerships, leveraging the ecosystem, teaming really closely not just with IBM Tech, but also with a broader ecosystem of partners, and continuing to invest in the depth of skills, but also the assets accelerators, to really help clients get value from those investments more quickly. That's first. The second one is, there's a lot of questions around is AI an opportunity or a challenge for services firms? We're really focused on creating opportunities and differentiating ourselves using it, which is why I've talked so much today about IBM Consulting Advantage platform and us using it to be able to deliver value from technology faster to clients. I'd say really leveraging AI as an opportunity and a differentiator for us would be second. Third, continuing to be all in and focused on hybrid cloud and AI. In a consulting firm, there's so many different spaces that you can play in. Our focus strategy and alignment with IBM's that I talked about upfront, staying focused, is really important. Last, but definitely not least, we're a people business in IBM Consulting, and we're a relationship business. Continuing to take actions and create a culture and environment where people feel supported and inspired and a place people want to work and continuing to make IBM and IBM Consulting an even better place to work is a fourth. It's definitely not a last but least kind of statement. It's equally important to everything else I talked about today, because it really is the heart and soul of our business in consulting, our people. Taking care of them and creating a good environment for them to thrive is really important as well. All right. Great. Thanks again for the very helpful conversation, Kelly. Appreciate it. Thank you, Ryan.