IBM: There Are Doubters
December 31, 2015
Watson has its works cut out for itself in 2016. I read “IBM Set to Drop 13% in 2015.” When one is tossing around a $100 billion outfit, the thought of a share drop is disconcerting. Will Alibaba or Jeff Bezos step in. Fixing up the Washington Post may be trivial compared with an IBM scale challenge.
According to the write up:
Much of the disappointment in the tech company is because it has been unable to replace its hardware and software legacy products with new cloud-based and AI products — at least not at a rate that would pull IBM’s revenue up. Its major branded product in new age technology is Watson. While Watson has been the source of press releases and small customer alliances, outsiders have trouble seeing what it does to sharply increase IBM’s sales. Granted, Watson may be one of the most impressive product advances among large companies in the sector recently, but what it does for IBM may be very modest.
Somewhat of a downer I perceive.
The smart software thing is not new. In the last 18 months, awareness of the use of various numerical recipes has increased. Faster chips, memories, and interconnections have worked their magic.
The challenge for IBM is to make money, not just marketing hyperbole. The crunch is that expectations for certain technologies are often more robust than possible in a market.
Watson is, when one keeps its eye on the ball, is a search and content processing system. The wrappers make it possible to call assorted functions. Unlike Palantir, which has its own revenue fish to catch, IBM is a publicly traded company. Palantir does its magic as a privately held company, ingesting money at rates which would make beluga whale’s diet look modest.
But IBM has exposed itself. The Watson marketing push is dragged into the reality of IBM’s overall company performance. In 2016, IBM Watson will have to deliver the bacon, or some of the millennialesque PR and marketing folks will have an opportunity to work elsewhere. Talk about smart software is not generating sustainable revenue from smart software.
Stephen E Arnold, December 31, 2015
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IBM: There Are Doubters : Stephen E. Arnold @ Beyond Search