Will Watson Make Billions for IBM?
May 20, 2012
Unlike other companies who spend their money snapping up smaller competitors or waging the patent wars, IBM focuses on good old R&D. That’s why InfoWorld’s Bill Snyder admires the company, he explains in “Beyond ‘Jeopardy’: How IBM Will Make Billions from Watson.”
Snyder praises the company for its focus on innovation over acquisition or legislation. He predicts the Watson technology will soon pay off big for IBM, though he admits the company is mum on how much cash went into the project. There are three big Watson-related deals in the works: Health benefits company WellPoint plans to use it to speed research and diagnosis. Cancer research institute Sloan-Kettering will use the technology to advance its essential explorations. Finally, Citigroup hopes to improve customer service with Watson. (But can it help with the image problems?)
Snyder acknowledges some may believe his claims about Watson’s future to be over the top:
“Did I drink a glass of Big Blue Kool-Aid during my meeting with Gold at San Francisco’s Palace Hotel this week? I don’t think so. If you look at the first real-world applications of Watson, you’ll notice they’re aimed at solving significant problems. Indeed, Watson may wind up saving lives — and, oh yes, make money for IBM and its shareholders.”
We’re all for the saving lives part, though we’re not too sure about the billions. Snyder isn’t the only one who sees Watson generating a fortune, though. He offers:
“In a research note late last year, CLSA analyst Ed Maguire estimated that Watson may generate $2.7 billion in revenue in 2015, adding 52 cents of earnings per share.”
So, are Snyder and Maguire right, is Watson a billion dollar baby? I wonder what answer it would give.
Cynthia Murrell, May 20, 2012
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