IBM Watson Tactic: Cherry Picking

November 10, 2016

I read “IBM Buys Watson-Based Expert Personal Shopper.” The article may reveal IBM’s plan to make Watson profitable. According to the write up:

IBM’s Interactive Experience (IBM iX) unit acquired the Expert Personal Shopper (XPS) division of Fluid, a provider of digital customer experiences.

The idea is simple. Pump money into promising Watson applications created by other companies. Then when the third party’s product begins to show signs of life, IBM steps in to buy the product. IBM sales professionals now have a real product to sell, not just consulting.

The personal shopper, according to the write up:

is a dialogue-based product-recommendation platform developed by Fluid that uses IBM’s Watson cognitive computing system to personalize the customer experience and improve product discovery. XPS uses natural language to interact with and provide personalized shopping experiences for customers.

If this sounds like the dozens of other smart chat bots, it may be. The difference is that this chatbot is an application of some of Watson’s capabilities.

Is this a quick and low cost way to convert Watson’s smoke and mirrors to cash? It depends on one’s point of view. The write up says:

In 2014, IBM invested in Fluid, drawing from a $100 million fund Big Blue had set aside to invest in Watson-based businesses and applications. Earlier that year, the IBM Watson Group made its first investment in Welltok, developers of the Watson-based CaféWell Health Optimization Platform. Fluid was among the early partners IBM trotted out to showcase how Watson had become available to developers to build apps around. IBM and Fluid worked to accelerate development of XPS at the time.

Two years later and at an undisclosed purchase price, IBM Watson has a product. From the point of view of a large company, this is definitely efficient. From the vantage point of a long suffering IBM shareholder, the time and cost are probably one more example of why IBM’s quarterly revenues have reported declines for more than four years.

Stephen E Arnold, November 10, 2016

Written by Stephen E. Arnold · Filed Under AI, Business strategy, IBM Watson, News

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Stephen E. Arnold monitors search, content processing, text mining and related topics from his high-tech nerve center in rural Kentucky. He tries to winnow the goose feathers from the giblets. He works with colleagues worldwide to make this Web log useful to those who want to go "beyond search". Contact him at sa [at] arnoldit.com. His Web site with additional information about search is arnoldit.com.