IBM: Why Did Watson Fail to Generate Billions?
January 22, 2015
I read a number of IBM earnings-related articles. None of the ones I examined addressed the question in my mind:
Why didn’t Watson, the smart search system, generate billions in new revenue?
A mainstream statement about IBM’s financial results appears in “IBM’s Mixed Earnings Results Show Troubled Year.”
Investors are watching for moves to put Big Blue back on an upward track. And Schroeter said that “strategic imperatives” like cloud computing, analytics, mobile uses, social media and security offerings will make IBM “the go-to platform for the enterprise.”
No Watson.
IBM has been doing financial engineering, not closing deals that generate revenue from content processing, text analytics, and next generation information access systems.
Why not? No answers jumped out at me.
My view is that IBM is better at Watson public relations than closing deals with customers and prospects with significant information access problems.
The reality is that IBM faces many challenges in content processing ranging from open source alternatives to new vendors with more compelling solutions.
I have tallied Watson’s proposed home runs in health care, recipes, and financial services. So far, from my vantage point in a hollow in rural Kentucky, IBM is struggling to get singles.
IBM’s Watson disappearance is one more indication of the difficulties that companies planning for huge multi billion cash intakes from content processing may face some challenges.
The companies with unrealistic expectations are likely to wish they could win a TV game show and touch up glitches in post production.
Is this what investors and stakeholders paid money to witness?
Stephen E Arnold, January 22, 2015
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