IBM Watson: Now About Generating Big Revenue
January 27, 2017
To IBM’s credit, since the “weather” changed, IBM’s Watson marketing has been less fun for me. I did enjoy reading “Elementary, My Dear IBM: When Will Watson Make Money?” I prefer the concept of substantial, sustainable revenue which generates profits for stakeholders, but the write up’s title is pretty good.
After asking this important question, the write up states:
IBM Watson has taken heat from Wall Street for not adding to Big Blue’s revenue as the company reported a 19th successive quarter of decline.
That’s quite a track record. Nineteen of anything in a row is difficult to pull off. Way to go, IBM.
I highlighted this passage as well:
But quizzing executives following IBM’s financial report on the fourth quarter of 2016, Morgan Stanley’s Katy Huberty noted that although Watson was getting a “pretty significant share of the press” – to put it mildly – unlike the other businesses that it was cited alongside, Watson was “not contributing to revenue”. Huberty probed when Watson would start bringing in money. IBM admitted to shaving spent a combined $16bn on R&D and acquisitions during 2016, including buying 15 companies such as the $2.6bn acquisition of Truven Health Analytics.
I put a Big Blue exclamation point next to this passage. IBM’s CFO commented about Watson’s payoff this way:
revenue would come through Watson serving IBM’s strategic imperatives and cognitive software. Watson is the “silver thread” running though Watson Health and Financial Services, IBM’s IoT and security, he said. “Watson is firmly, firmly established as the silver thread that runs through those cognitive solutions and you can see all of that in the solution software performance.”
Okay, shareholders, there’s your answer. What can one weave with silver thread? How about some silver thread pants for the executive who needs to slay financial dragons in World of Warcraft.
Stephen E Arnold, January 27, 2017
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