‘IBM to sell Watson Health branch’

Get a free Techzine subscription!

There are rumours that IBM is planning to sell its Watson Health branch. IBM aims to streamline its activities more and no longer consider the branch profitable enough.

The Wall Street Journal writes this based on people familiar with the matter. IBM would like to focus more on the world of cloud computing and let go of parts that have less to do with it.

AI in the health industry

Watson Health is active in the world of healthcare. It helps companies in the health industry with techniques such as artificial intelligence to manage their data. Watson Health consists of brands like Merge Healthcare, which analyses mammograms and MRIs, Phytel, which helps with patient communication, and Truven Health Analytics, which analyses health data.

Not profitable

Currently, Watson Health has yearly revenues of about 1 billion dollars, but according to The Wall Street Journal’s sources, that does not make the company profitable. It is not clear how much IBM could raise by actually selling the company. Who IBM might want to sell the company to is also left to the imagination. Possibly it is looking at separate investment companies or other players in the industry. Another tactic is to take Watson Health public as an independent company.

New direction

The idea of splitting off Watson Health is presumably the brainchild of Arvind Krishna, who recently assumed the role of CEO of IBM. IBM announced last fall that it would spin off some of its IT services to cut costs. Presumably Krishna has a similar vision for Watson Health.

Watson

IBM uses its AI techniques for several things. The Watson name, after IBM founder Thomas J. Watson and his son of the same name, is mainly used for algorithms capable of understanding human speech. These techniques are used, for example, for chatbots or live translations of video conversations. However, IBM also uses the Watson name for other branches where AI is applicable.

Tip: IBM Watson Health pulls plug on Drugs Discovery service