IBM Launches $1B Watson Business Unit

By Darryl K. Taft  |  Posted 2014-01-08

IBM Launches $1B Watson Business Unit

As part of an ongoing effort to continue to advance and monetize its Watson cognitive computing technology, IBM announced the opening of a new business unit focused on the technology along with two new Watson-based products.

IBM announced it will establish the IBM Watson Group, a new business unit dedicated solely to the development and commercialization of cloud-delivered cognitive innovations. The move signifies a strategic shift by IBM to accelerate into the marketplace a new class of software, services and applications that think, improve by learning, and discover answers and insights to complex questions from massive amounts of disparate data, the company said.

Moreover, IBM will invest more than $1 billion into the Watson Group, focusing on development and research and bringing cloud-delivered cognitive applications and services to market. This will include the establishment of a $100 million venture investment fund to support IBM’s recently launched ecosystem of start-ups and businesses that are building a new class of cognitive apps powered by Watson, in the IBM Watson Developers Cloud.

The IBM Watson Group will be led by Michael Rhodin, who most recently served as senior vice president of IBM Software Solutions Group (SSG), responsible for a portfolio of key IBM products such as business analytics, Smarter Cities and social business solutions.

"In just three years, IBM has transformed Watson from a quiz-show winner, into a commercial cognitive service breakthrough that is helping businesses engage customers, health-care organizations save lives and entrepreneurs build businesses," Rhodin said in a statement. "This is a pivotal moment: the new era of cognitive computing is happening right now and IBM is investing to not only win the market, but spark changes that improve lives, spur innovation and transform industries and professions."

Rhodin told eWEEK IBM views cognitive computing as perhaps the next of what have been tectonic shifts in IBM’s history and technical direction. The first was tabulating systems, upon which the company was founded in 1911 as the Computing Tabulating Recording Company. The second came in the 1950s with electronic programmable mainframe computers and the third is cognitive computing, he said.

“We think cognitive computing is one of the most important innovations in IBM’s history,” Rhodin said. And with the pledge of a $1 billion investment, IBM is putting its money where its mouth is. Other technologies IBM has pledged $1 billion to have included Linux and flash storage. The company has invested much more than that on the cloud and analytics with acquisitions and R&D.

The IBM Watson Group will have a new headquarters at 51 Astor Place in New York City’s “Silicon Alley” technology hub, leveraging the talents of 2,000 professionals, whose goal is to design, develop and accelerate the adoption of Watson cognitive technologies that transform industries and professions. The new group will tap subject matter experts from IBM’s Research, Services, Software and Systems divisions, as well as industry experts who will identify markets that cognitive computing can disrupt and evolve, such as health care, financial services, retail, travel and telecommunications.

The Watson Group’s headquarters will provide a client solutions center, serving as a place for IBM clients to experience cognitive technologies and learn how they can help transform their businesses. In addition, the headquarters will host a design lab for continuously enhancing the user experiences for cognitive applications and services used by IBM clients and partners.

IBM Launches $1B Watson Business Unit

The Watson Group will also offer workshops and seminars on topics such as development skills, as well as networking opportunities. These events will build upon the 1,000 academic partnerships that IBM has developed to prepare university students for careers in cognitive computing, big data and analytics. This includes Watson-inspired business and technical challenges, new curriculum, faculty grants and internships.

The launch of the IBM Watson Group includes the introduction of two new cloud-delivered products based on Watson’s cognitive intelligence. The first offering, the IBM Watson Discovery Advisor, aims to revolutionize how industries such as pharmaceutical, publishing and education conduct research. Unlike some tools that churn out thousands of search results that users must wade through, the Watson Discovery Advisor will delve into the influx of data-driven content today’s researchers face, and uncover connections that can speed up and strengthen their work.

The second offering, IBM Watson Analytics Advisor, enables business users to send natural language questions and raw data sets into the cloud, for Watson to crunch, uncover and visualize insights, without the need for advanced analytics training. After analyzing the data, Watson will deliver results to its users through graphic representations that are easy to understand, interact with and share with colleagues, all in a matter of minutes. This cloud-delivered service is part of IBM Watson Foundations that helps organizations maximize the core big data and analytics capabilities that fuel Watson and enables clients to gain fresh insights in real-time, and act upon those insights with confidence.

The IBM Watson Group will comprise four sub-groups:

•             IBM Watson Innovation: This team will serve as the core research and development function for the Watson Group, chartered with delivering, developing and advancing the core code base for next-generation commercial cognitive capabilities and solutions.

•             IBM Watson Transformation: This team will explore and recommend industries and markets in which cognitive computing holds the potential to disrupt and transform how business is done. The team will comprise experts in the fields of health care, financial services, retail, telecom and travel, who will help advance the development of Watson-powered solutions.

•             IBM Watson Implementation: This team is responsible for implementing and ensuring IBM clients achieve the full value of cloud-delivered Watson solutions. This includes the Watson Engagement Advisor, a technology breakthrough launched in 2013 that allows clients to transform key business functions such as customer engagement.

•             IBM Watson Engagement: This team will manage the marketing and sales of Watson-powered products. It will also manage the growth and investments in IBM’s recently launched initiative to build a worldwide ecosystem of software application providers that are building a new class of cognitive apps.

Nearly three years after its triumph on the television quiz show Jeopardy!, IBM has advanced Watson from a game-playing innovation into a commercial technology. Now delivered from the cloud, powering new consumer and enterprise apps, Watson is smarter, faster and smaller with a 240 percent improvement in performance and a 75 percent reduction in physical size.

IBM Launches $1B Watson Business Unit

Named after IBM founder Thomas J. Watson, IBM Watson was developed in IBM’s Research labs. Using natural language processing and analytics, Watson processes information akin to how people think, representing a major shift in an organization’s ability to quickly analyze, understand and respond to big data. Watson’s ability to answer complex questions posed in natural language with speed, accuracy and confidence is transforming decision making across a variety of industries.

However, despite its capabilities, the complexity of the Watson solution has sparked criticism by some. David Lloyd, CEO of virtual agent provider IntelliResponse, said Watson does not offer what companies need. “For the average retail bank or fast-growing startup, Watson is like buying a Formula One car for your 20-minute commute,” he said.

Lloyd, who works every day with companies seeking to improve their online customer service, says while Watson's advanced cognitive reasoning may be a cool novelty, the high price tag, granular answers and time investments necessary to train such a complex system don’t make sense for them. Their customers either want a real person to hash out a complex issue, or they’re task-oriented: they want a single right answer to their question to get in and get out, no bells and whistles, he said.

Meanwhile, IBM has partnered with a range of health care organizations to transform how medicine is practiced, paid for and taught, via Watson-powered solutions. This includes collaborations with Memorial Sloan-Kettering Cancer Center, WellPoint, the University of Texas MD Anderson Cancer Center, and the Cleveland Clinic Lerner College of Medicine of Case Western Reserve University.

In May 2013, IBM released the Watson Engagement Advisor, a product that helps businesses deepen and redefine engagement with customers. IBM is now working with top brands who are exploring how Watson can help them engage customers, including The Nielsen Company and Royal Bank of Canada.

In November 2013, IBM announced it would make Watson available as a development platform in the cloud, enabling software application providers to build a new generation of apps infused with cognitive computing intelligence. This includes the Watson Developers Cloud: a cloud-hosted marketplace where application providers can tap into resources for developing Watson-powered apps, including Watson's API. Three partners will go to market in 2014 with Watson apps, from  Fluid to transform how consumers shop, from MD Buyline to help hospitals procure devices, and WellTok to enable health plans to engage their members. More than 760 applicants have shared their ideas for creating cognitive apps that redefine how businesses and consumers make decisions.

IBM collaborated with eight universities to develop Watson’s capabilities. Over the past three years, IBM has introduced through its Academic Initiative a range of academic programs to prepare students to become tomorrow's cognitive computing leaders. This includes Watson-focused case competitions, with the University of Connecticut (UConn), University of Rochester and University of Southern California (USC). IBM also works with schools such as the University of Michigan and UConn to develop Watson-inspired curriculum, while offering faculty grants to fuel additional coursework. Other academic ventures include the Watson internship program and IBM’s donation of Watson technology to Rochester Polytechnic University.

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