IBM Boosted Watson Capabilities through Strategic Acquisitions
Can Strategic Imperatives Turn IBM Around in Fiscal 1Q16?
IBM has made four strategic acquisitions to boost Watson
IBM (IBM) is betting heavily on Watson, its cognitive computing platform, to steer the company toward much-needed growth. Morgan Stanley (MS) also bet heavily on Watson’s adoption for IBM’s future growth. Watson could be the highlight of IBM in 2016.
IBM’s focus on and investments in Watson are evident in its February 2016 acquisition of Truven Health Analytics for $2.6 billion. Prior to Truven, IBM acquired Merge, Phytel, and Explorys to boost Watson Health. IBM paid approximately $4 billion for these four acquisitions.
IBM’s acquisitions have boosted Watson’s imaging capabilities
Explorys and Phytel gave IBM access to ~100 million electronic medical records of Americans. Merge provided 30 billion medical images. These acquisitions offered Watson a significant growth avenue in the healthcare space, as the healthcare sector’s primary information is in imaging.
IBM acquired Truven Health to complement its data strategy for the healthcare space. According to the Wall Street Journal, IBM intends to get its hands on more data through these acquisitions and partnerships.
Truven has payer information, including government payment systems and private insurers. IBM gets information at the front end of each patient through their imaging data, outcomes, and payment. IBM has full access to the hospital as well as the insurer, which enables it to provide what it calls an “end-to-end optimized solution” on that data.
In early 2016, IBM stated that Medtronic (MDT), Under Armour (UA), and Japan-based (EWJ) SoftBank Robotics are using Watson in a variety of ways.
In the next part, we’ll look at Watson in more detail. We’ll see if Watson could be a game-changer for IBM.
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