Watson Archives - Everest Group

It’s an AI Haven, My Dear Watson | Sherpas in Blue Shirts

June 16, 2016

By releasing Haven-on-Demand APIs on Microsoft Azure, HPE is following in the footsteps of IBM. Big Blue made its Watson API’s available on BlueMix a while ago. Furthermore, it recently announced a collaboration with Twilio, a cloud communications platform for developers, as part of which it introduced two new offerings: IBM Watson Message Sentiment and IBM Watson Message Insights, pre-integrated with Twilio’s APIs. This signaled IBM’s willingness to make Watson APIs accessible to a wider community of developers, beyond BlueMix. This is also what HPE is doing by making Haven-on-Demand available on Microsoft Azure.

The two technology giants are not alone in releasing their artificial intelligence APIs. Other technology vendors such as Google have done the same. The IBM and HPE differentiator (for HPE for now and until the details of the CSC deal are finalized) is that they are also IT and business process service providers. They can leverage their own intelligent technologies to transform client’s services.

The world of services is also changing fast thanks to technology, including automation enabled by both dumb and intelligent software. In particular, in recent years we have seen service providers invest in intelligent technologies to automate their offerings. Apart from IBM and HPE, others include (in alphabetical order) Cognizant Intelligent Automation Platform, Infosys Mana, TCS Ignio and Wipro Holmes. Like it or not, the human intelligence component of IT and business process service provisioning is giving way to machine intelligence, but this is a discussion for another blog.

In the world of services, too, IBM and HPE have a differentiator and that is they are well known technology providers. The other service providers are simply not known for this. They might enter the market for selling intelligent technologies (and in fact some are) but it will be a while before they can grow this line of business. In the meantime IBM and HPE are building a presence in the third-party software apps world. By having their technology embedded in many third-party applications, the tech giants are betting on creating their very own de facto standards for intelligent software to boost future tech and services revenues. Owning an industry standard would make it easier for IBM or HPE to integrate their offerings to automate services in the future and there will be other advantages such as faster adoption and client on-boarding and transitioning.

Their open APIs give IBM and HPE an advantage over both technology and services competitors. Although that’s the current situation, given the rapidly changing technology market, a disruptor could emerge anytime and change this pretty picture. The challenge for IBM and HPE is to increase the number of fully fledged third-party applications that use their API to make it tougher for a disruptor to shake up this burgeoning market.

As far as the technology part of the market goes, of course, IBM and HPE are in competition with the likes of Microsoft and Google who are extremely well versed in the art of getting wide and global adoption of their technologies.

HPE faces another challenge, and that is not to lose focus on this line of business while the spin off and merger of its Enterprise Services with CSC goes through.

Time and again history has shown that wide adoption and availability of applications can boost sales of underlying or enabling technologies, e.g. Microsoft Windows and Android to name but a few. IBM and HPE are looking to do the same in the more complex world of artificial intelligence. This is an area that promises much growth in the coming years, and we will be watching it with interest.

IBM’S Truven Acquisition: What Works … What Might Not | Market Insights™

February 28, 2016

IBM’s February 2016 announced plan to acquire Truven is yet another in a recent spate of healthcare market mergers/acquisitions. The Truven purchase, IBM’s fourth major acquisition since establishing Watson Health in 2014, offers IBM access to data integration and analytics services and solutions.

Visit the report page

IBM’s Watson Ups the Ante in Healthcare | Sherpas in Blue Shirts

August 11, 2015

The recently announced acquisition of Merge is one in a string of initiatives by IBM to increase both its market presence and depth of offerings to the healthcare sector. With birth rates increasing in many parts of the world and the aging population growing in developed countries, the race is on for data driven and highly efficient healthcare.

IBM is clearly targeting this market. Its recent activities have included:

Entering into new partnerships with companies such as Apple, Johnson & Johnson, and Medtronic for health-related data collection, analysis, and feedback
A partnership with CVS Health to develop care management applications for chronic diseases
Acquiring Explorys, a healthcare data provider, and Phytel, a hospital care coordination information provider
Buying AlchemyAPI to include text analysis and computer vision capabilities into Watson’s computing platform
Establishing a dedicated business unit called IBM Watson Health, headquartered in the Boston, MA, with the specific remit of growing its healthcare business
Collaborating with leading hospitals and research institutes including Memorial Sloan Kettering Cancer Center, University of Texas MD Anderson Cancer Center, the Cleveland Clinic, and the Mayo Clinic to leverage Watson’s healthcare capabilities at the cutting edge of medical research
Setting up IBM Watson Health cloud to bring together data for healthcare and research

The US$1 billion acquisition of Merge brings IBM a medical imaging platform to combine with Watson’s image data and analytics capabilities and an extended client base. Excellent and Elementary, Dr. Watson.

With these initiatives, IBM is building specialist competences, to capture, analyze, and recommend treatments or actions that would help healthcare providers, payers, pharmaceuticals, as well as individuals achieve positive health outcomes.

Gaining a wide range of capabilities in specific areas has helped IBM generate specific segment revenue in good and bad times. For example, its large number of information management and WebSphere portfolio acquisitions (e.g., Cognos, Netezza, and SPSS, to name but a few) has seen segment-specific revenues maintain steady growth over the years.

If IBM was to successfully combine its deep specialization in healthcare with Watson’s cognitive computing to enhance its services, it could gain a big edge over competitors at a time when demand is set to grow. At the moment we are seeing more of IBM in healthcare IT infrastructure modernization contracts than data-driven care provisioning and support services. Recent examples include:

A contract to update the UK NHS’ electronic staff record (ESR) system, adding mobile access and self-service capabilities for 1.4 million employees
A contract to provide mainframe and data center server and storage infrastructure services for Anthem Inc, a U.S.-based health benefits company, for the next five years at TCV of US$500 million

These types of contracts give IBM opportunities to tap into new solution and services openings at existing clients.

Other challenges for IBM’s intelligent and data driven healthcare offerings include:

Collecting enough data for its solutions to be relevant to, as well as accessible in, different parts of the world
Data protection barriers in Europe
Poor cloud infrastructure in emerging economies.

IBM is going all out when it comes to showcasing Watson as a competitive differentiator. In an uncharacteristic move (and a sign of the times), it has launched Watson Developer Cloud, an open platform for developers to build apps on top of Watson for industry-specific solutions (through a set of APIs and SDKs). It is also working with app developers such as Decibel, Epic, Fluid, Go Moment, MD Buyline, TalkSpace, and Welltok to build apps embedded on Watson technology, thereby, rounding up a robust ecosystem. It is abundantly clear that IBM views healthcare as the principal vertical where Watson’s computing prowess can make its mark. In the meantime other service providers are likely to build or acquire their own cognitive capabilities to challenge IBM on pricing and specialist offerings.

Photo credit: Flickr

Digital Transformation – Will IBM Attain its Aspirational Leadership Position? | Sherpas in Blue Shirts

June 15, 2015

Everest Group had the opportunity to attend IBM’s APAC analyst day in India on 11-12 June 2015. Business and technology leaders from IBM presented their offering portfolio, demos, and real life transformative case studies with active participation from their clients. One thing that stood out was how Big Blue is communicating not only its technology vision, offerings, and organizational commitment toward open technologies, but also its internal transformation to serve clients and reclaim its technology leadership position. It realizes that the “old IBM” ways will no longer work, and it needs to become more nimble and innovative, and play an important part in shaping the technology disruption the digital age has brought onto us.

What’s happening?

Earlier this year, IBM aligned its go-to-market strategy around key industry verticals. It also created internal structures to make myriad of its offerings, technology groups, services business, sales and marketing, and its research lab work in sync. It believes this will help create solutions that are required to leverage digital technologies, and thereby not only redefine itself, but also create a new ecosystem of product and service providers around it.

Going back in the history, IBM truly transformed the technology industry when it invented the Mainframe. And while today’s technology becomes tomorrow’s legacy, no one can deny that the Mainframe was a historical system that shaped and created the technology industry as we know it today.

However, since then, IBM became a nuts and bolts company providing middleware, desktops, and back-end efficiency solutions focused on enterprise computing. While it did introduce incremental innovation and acquire many technology companies, it did not play a meaningful role in shaping the industry vision. It continued to invest in its research labs, and its products were always considered leaders in enterprise computing. But it hasn’t been a leader in true enterprise technology transformations such as the rise of ERP, virtualization, SaaS, or IaaS.

This has changed. The analyst meeting demonstrated that digital has become the new pivot around which IBM will take back its earlier pedestal position of being the company that forms, shapes, and guides the technology industry. This story was ably supported by multiple client interactions during the event. Clients say that this is not the IBM they had earlier worked with, or had expected to work with.

IBM’s much publicized partnerships with digital native firms like Facebook and Twitter, and leading user experience and design companies such as Apple, are an important but small part of its digital journey. The bigger part is moving away from its traditional way of working, and realizing that it must play a key role in the digital everywhere environment. Its increased focus and core commitment toward open technologies is highly apparent. And it has always had the technology, scale, and reach to transform businesses. Now, the muscle it’s putting behind Softlayer and BlueMix, its mobility play, and its investments in analytics, the Internet of Things (IoT), and Watson have the potential to transform not only its clients but itself as well.

Is there any challenge?

With its go-to-market alignment with industry verticals, IBM can bring effective solutions to clients looking to transform their businesses. However, disruption in most industries is happening from the outside, (e.g., Uber to the taxi industry, Airbnb to hospitality, Apple Pay to banks, and Google cars to automotive), rather than within. Therefore, a rigid structure around industries may not work well. IBM will need to ensure that its technology, industry verticals, and innovation groups talk to each other, an area where it has historically struggled.

Moreover, monetization of some of these innovations will be a long, drawn out process. IBM has had significant growth challenges, and has shed many of its businesses. For its growth and profitability to return –which should be the big drivers along with reclaiming its innovator status – IBM has to do a lot more. It has historically been viewed as a company that helps clients’ operations run more efficiently; it now needs to carefully position and communicate its willingness and ability to partner in clients’ growth.

Where does IBM go from here?

In addition to the digital technologies IBM possesses, other of its strong strategic initiatives include: internal transformation around reskilling the workforce toward innovation and design thinking; commitment to open technologies; collaborative alignment between its services business and its technology groups; renewed commitment toward client centricity; improved sales effectiveness; and focus on solving core industry problems.

IBM’s changes have been pushed right from the CEO’s office, and IBM executives believe results will be visible in the next 6 to 12 months. IBM needs to play a dual role in which it helps some clients disrupt their industries and business models, and assists others sail through the digital disruption. It again needs to become a technology innovator. While it’s a difficult task, we believe it has the needed technology, vision, and now internal alignment to achieve these objectives.

The Future of IBM’s Watson and Cognitive Computing | Sherpas in Blue Shirts

June 2, 2015

I had the privilege of being at IBM and seeing first hand Watson working on powerful use cases. I must say, even now after a few days of reflecting on it, I think I’m even more impressed with its power and capability than when I was at IBM and saw Watson in use. If, like me, you spend two hours with Watson, you will get a glimpse at our future. It’s highly likely that within five to 10 years all of us will use some kind of cognitive computing to assist us in our daily lives. But I believe there is a major challenge.

Just a quick refresh: Watson is cognitive computing, a form of artificial intelligence. Previously I did not understand the way it will be deployed; it will augment human decision making, not replace people. That’s not to say that an individual assisted by Watson won’t be able to do the work of many more individuals. At least at this stage of development cognitive computing makes humans more capable and smarter.

For example, I saw Watson working as a companion to an oncology doctor, helping him perform more thorough diagnostics. In the situation I observed, the oncologist was able to cut the diagnosis and testing process from six days down to two hours. That doctor was far more effective because Watson can explore many more options and present hypotheses and data to the doctor and medical team than they could have explored on their own (plus it would have taken far more time for them to do it). In addition, it’s not hard to believe that the team would be more likely to do a better diagnostic with Watson as companion than they could achieve through traditional techniques.

With all that being said, I think Big Blue faces a major challenge with Watson at the moment: Watson is a solution looking for a problem.

As I understand it, IBM invested over a billion dollars in Watson’s development. On TV we saw Watson defeat a chess Grandmaster and then win on “Jeopardy.” However, now Watson needs to make the journey to operate in the real world of business problems.

These use cases and applications are still undefined and will emerge over time. It is, in fact, the challenge of problem definition and incremental adoption that stands in the way of progress. It’s easy to imagine that there are limitless applications for Watson; but for Watson to take off quickly, we need to identify big issues with large payoffs. Without these game-changing applications we will wait for several years for cogitative computing to make the contribution that it is clearly capable of.

To recover its billion-dollar investment and create a market for cognitive computing, IBM has every incentive to hasten the adoption. However, it has yet to identify the break-through problems that will drive rapid adoption. It is all very well to believe that the power of the technology will inevitably drive adoption; but if cognitive computing is like other disruptive technologies, it will come slowly and in spurts.

Where does cognitive computing fit?

To hasten adoption, my best – and unsolicited – advice to IBM is to identify big business problems where Watson can make a structural change and drive massive benefits. Clearly, working as a companion to oncologists is such an area. And given that healthcare is 20 percent of the U.S. GDP that alone may be worth the journey.

But for enterprises beyond healthcare, I feel challenged as to what other big structural changes Watson and cognitive computing could provide.

I strongly suggest that you find a way to experience Watson’s power. It’s is so powerful that I, like IBM, am struggling with where we should take it.

As I’ve pondered its possibilities, I think underwriting and the claims process in the insurance sector holds tremendous opportunities. And within IT, I think the service desk and problem solving that IT departments contend with could be dramatically enhanced with this technology. With a cognitive computing tool as their companion, they could deliver a higher quality of service and greatly improve productivity. Clearly the area of security would benefit substantially as we find ways to keep the black hats out of our data.

I’m very interested in other points of view as to where we can put cognitive computing to work, so please add your comment below.

Photo credit: Wikipedia

Announcing our inaugural conference: Everest Group Engage, The Pragmatic Edge: Designing Your Future. Learn more.

Tag: Watson