Earlier this week IBM launched a new business unit to commercialize and begin to capitalize in earnest on its Watson cognitive computing technology.
Big Blue announced its IBM Watson Group Jan. 9 at a big function in New York City. However, just prior to the launch there was a report calling the systems, software and services giant out for falling short on its effort to monetize the Watson technology.
I'm not an IBM apologist, but I believe that while the critics took what appears to be a well-intentioned look at what IBM has been doing with some of its early Watson projects in health care and financial services, it seems a bit unfair to criticize the company for not having made a ton of money on something it has consistently maintained was still in its early phases.
In any conversations I had with IBM executives about Watson, they always said commercialization efforts had not been finalized and the early projects were learning experiences for both the clients and IBM. Nobody ever tried to claim that Watson was going to ring in the dough by the beginning of 2014. Were there high hopes for the technology? Sure, but there was also a lot of caution and conservatism about when it would be ready to present to the mainstream IBM customer.
In short, IBM played the Watson effort like a startup inside the company. Many startups take years to make any kind of money—indeed many carry on for a few years in stealth mode until they can get traction enough to make a splash. As Watson got its initial exposure by beating human competitors on the Jeopardy game show, operating in stealth mode was not possible. However, IBM chose that venue.
The company is not without its faults, but judging Watson now is premature. There was only one Watson-based product before this week—the Watson Engagement Advisor, announced last May. In my opinion, IBM didn't go on the clock with Watson until November when it gave third-party developers access to Watson via the Watson Developer Cloud and announced an ecosystem for the technology.
Then this week came the new IBM Watson Group, with a new location in Manhattan's Silicon Alley and an IBM golden boy in the name of Mike Rhodin to run it. Rhodin has a string of successes at IBM and if CEO Ginni Rometty put him in charge of this newly created unit, it's because the company is serious about it and needs a proven leader in that position. To jump-start the operation, IBM has committed $1 billion—$100 million of which will go to building up the ecosystem—and 2,000 employees, with one-third of IBM Research dedicated to Watson.