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IBM Idea Proposal (IBM)

IBM Idea Proposal (IBM)
 

Is IBM’s Watson a marketing gimmick or will it push the company to the forefront of the AI technology revolution?

Report Available:July 12, 2017

 

Blueshift’s initial research found Watson a key piece of IBM’s reinvention efforts. The AI-based supercomputer is being used in a variety of fields, including medicine, retail, and finance. Watson, however, has been slow to contribute to IBM’s bottom line, leading some to wonder whether it will ever deliver on its promise beyond starring in TV commercials and game shows.

 

Observations

  1. IBM’s Watson is at the center of the company’s efforts to transform itself into a cognitive solutions and cloud platform business. The company has been touting the supercomputing platform as a way to leverage artificial intelligence for finance, cybersecurity, medicine, and other fields. Visa is using Watson to turn cars, appliances, and other internet-connected devices into potential points-of-sale. HRB deploys Watson to help consumers find tax deductions. And CRM is partnering with IBM to combine Watson with its Einstein AI platform to provide big data insight in a variety of industries.
  2. Watson’s greatest promise may be in healthcare, where artificial intelligence is being touted as a better way to diagnose medical conditions and develop treatments. Watson already is being used to understand genetic testing results, find new drugs, and recommend cancer treatment options. In the first quarter, IBM introduced Watson Imaging Clinical Review and said that almost half of the top 25 life sciences companies are using its cognitive solutions.
  3. Some investors, however, have become impatient with how long it is taking Watson to contribute to IBM’s bottom line. In May, BRK.A CEO Warren Buffett said he had sold about 30% of his IBM stake. Buffett praised Watson as an “amazing invention” but said, “ithas not come along as fast commercially as you would have hoped.” IBM may have had a technology lead in artificial intelligence five years ago, but it is not clear that it still does with giants like GOOG, AMZN, AAPL, FB, MSFT, and many others working in the field. Watson remains best known for its TV commercials and appearances on Jeopardy!
  4. IBM’s Q1 revenues fell 2.8% over the prior year, the company’s 20th consecutive quarterly decline in year-to-year revenues. IBM does not break out Watson-specific revenue but said its analytics revenues were up 7%. Gross margins continued to be weak.

 

Is Watson a leader in artificial intelligence? In what fields can Watson have the biggest impact? How quickly can IBM ramp its Watson-related revenues?  To answer these and other questions, Blueshift will gather data and issue a market research report from independent sources in the following areas: Medical researchers, Retail executives, Big Data analysts, Artificial Intelligence technology developers, and Industry specialists.

 

 Companies: International Business Machines Inc. (IBM), Microsoft Corp. (MSFT), Alphabet Inc. (GOOG), Facebook Inc. (FB), Apple Inc. (AAPL), Amazon.com Inc. (AMZN)

 

Research Begins: June 19, 2017