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International Business Machines Corp. has formed a new business unit to capitalize on the recent groundswell in artificial intelligence.
The new Cognitive Business Solutions group will be run by Stephen Pratt, previously an executive in the consulting practice at Indian outsourcer Infosys. The new division’s 2,000 employees will advise companies in how to take advantage of IBM’s Watson artificial-intelligence software.
IBM Chief Executive Virginia Rometty is expected to announce the group on Tuesday at the Gartner Symposium, a gathering of information technology executives, in Orlando, Fla.
Introduced in 2011, Watson excels at analyzing vast quantities of information to uncover relationships that humans might miss. It has assisted oncologists at Memorial Sloan Kettering Cancer Center, contributed to a recipe book, and bested champions of television’s “Jeopardy” game show.
IBM believes it could serve as the core of a new generation of ultrasmart digital assistants in data-heavy industries such as medicine, financial management and oil-and-gas exploration.
“We see that that is going mainstream,” said Bridget van Kralingen, senior vice president of IBM Global Business Services in a telephone interview. “It’s very, very early days, but we can see it.”
IBM has bet $1 billion on the technology and has high expectations for its growth. The company counts Watson as part of its $17 billion analytics business, but it won’t specify Watson’s portion of that total. It has set a revenue target of $1 billion annually by 2018, The Wall Street Journal previously reported, though the path to profit hasn’t been clear.
“It’s not huge yet,” said David Schubmehl, an analyst with research firm International Data Corp. “It’s not doing hundreds of millions of dollars, but it is significant.”
IBM collects a percentage of revenue from developers who base their programs on its Watson Developer Cloud service. More than 350 partners use the service, IBM said in a blog post last month, to extract useful information from large quantities of data.
But the company sees a significant opportunity in professional services as less technical companies adapt the technology to their unique problems. The Cognitive Business Solutions group will help such customers tailor the software to their business needs, for instance, helping technical support personnel answer questions or analyzing Twitter messages to reveal fashion trends.
The Cognitive Business Solutions group will also advise customers on data-intensive topics such as business analytics, security and the Internet of things, IBM said.
Amazon.com Inc., Apple Inc., Facebook Inc. and Google Inc. have taken advantage of recent advances in artificial intelligence to provide virtual assistants and to improve their voice- and image-recognition capabilities.
As companies with less technological expertise aim to put these techniques to use, they will turn to IBM and Watson, Ms. Kralingen said.
“We believe as this capability gets stronger—and we’re seeing it—it will become a basis for organizations to compete,” she said.
Write to Robert McMillan at Robert.Mcmillan@wsj.com
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"Introduced in 2011, Watson excels at analyzing vast quantities of information to uncover relationships that humans might miss."
Isn't that just number crunching? Why is it being called "artificial intelligence?"
Furthermore, if a company hacked another company's data and then asked Watson to analyze the hacked data, would Watson resist on ethical grounds?
It is a boon for the entire AI/Cognitive Computing community that IBM has invested a billion dollars into their new business. They have single handedly created a new market segment, and promoted an awareness for the technology within all Fortune 500 companies. The real beneficiaries are startups with more innovative software that can accomplish intelligent tasks that IBM's product can only dream of. In the end, it won't be about who was first to market, or who pumped the most money into advertising, it will be about who builds the smartest machines...
Interesting that IBM retains the "Cat Bird Seat" advantage in AI developments using Watson. They'll have an inside seat early on to write checks for those that have long term promise - somewhat akin to farming a field of useful dreams...,
