IBM reportedly bought Watson Health just as healthcare is getting hot - TechCrunch

IBM reportedly bought Watson Health just as healthcare is getting

IBM could look to sell Watson Health's division for just $ 1 billion, according to an Axios report. The question is why is IBM running away from the healthcare field just as it seems to be heating up, and for such a low price?

Just last month, Oracle spent $ 28 billion to buy digital health record company Cerner. Last spring, Microsoft spent nearly $ 20 billion on the acquisition of Nuance, which is widely used in the medical industry, which has 10,000 healthcare customers. That's big money, suggesting that enterprise companies are looking to adopt direct health care and are willing to spend a lot of money to do it.

IBM launched launch of Health Health in April 2015. He was supposed to take Watson, IBM's artificial intelligence platform, and put it to work on health care problems. The argument went something like this. Even the best doctor cannot read all the literature out there, but a computer can do it quickly, and it may suggest courses of action to increase the doctor 's knowledge and achieve better results. .

He then did what IBM does when it comes to something. He opened an elegant headquarters in Cambridge in September of that year. He also began announcing partnerships. He looked at all the boxes, in partnership with the likes of CVS, Apple and Johnson & Johnson.

Then he started buying companies. The first purchase was medical data companies Phytel and Explorys. That was part of a pattern. Then came $ 1 billion for Merge Healthcare, a company that would provide medical imaging data. He would later make the most expensive purchase, Truven Health Analytics for $ 2.6 billion. In total it reportedly cost $ 4 billion, which is now relatively small compared to what Oracle and Microsoft just spent, but it was a lot of money in 2015 and 2022 when it preparing.

This was all about using a data-driven approach to feed Watson Health machine learning models. For whatever reason, it did not work as expected, but it was a big part of former CEO Ginni Rometty's plan to modernize the company by focusing on areas such as cloud and AI.

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Rometti was optimistic when she spoke to Harvard Business Review in 2022:

Our moon image brings world-class healthcare to every corner of the globe. Some of that is already happening. Watson is trained by some of the best cancer centers in the world and then distributes it to hundreds of hospitals in China and India. Some of these areas have just one oncologist for perhaps 1,600 patients. People in these areas had no access to world - class healthcare. Now they can, with Watson as an oncology consultant helping doctors make decisions. And this is just the beginning.

But Rometti left in 2022, and her other partner, Arvind Krishna, has different priorities. He told Axios that a broad healthcare vision may have been overly optimistic. That might explain why IBM is looking to find out, Holger Mueller, an analyst at Constellation Research, tells me.

“IBM is very focused on its hybrid cloud strategy. In the process it seeks to get rid of all the assets that attract attention and capital, as well as carry the risk of reputational damage. Watson Health certainly deserves all three, so it's no surprise that IBM could put the unit off, "Mueller said.

While IBM is likely to continue to pursue the healthcare industry in other ways across the company, even if it ends up dumping Watson Health, it still needs to be considered as a strategy. failed after pouring in so much money and recovering so little. Of course, it still deserves a rumor, even if it's not a big surprise to see it come to fruition.

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