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IBM is investing $1bn in Watson to generate more revenue from cognitive computing

IBM is investing $1bn in Watson to generate more revenue from cognitive computing

Following IBM’s announcement in November last year that the company would open its cognitive supercomputer Watson to third parties to develop their own applications and cloud-services on the platform, the tech giant announced Thursday a combined $1bn investment into the Watson that includes a shiny new office in New York, and a lot of engineering and marketing resources.

IBM’s Watson, the cognitive intelligence computing platform that most remember from a brief but successful stint on the US hit show Jeopardy in 2011, has been struggling to generate revenue since its inception.

According to conference call transcripts reviewed by the Wall Street Journal Watson has only generated generate $100m over the past three years, well short of the $1bn annually its executives suggested the platform could rake in.

In a bit to bolster those numbers IBM is putting $1bn into a new Watson business unit, to be housed at a brand new office in New York City.

The business unit will include over 2,000 IBM engineers and technical professionals to work on platform development, and work with external companies looking to innovate on top of it.

The company is also setting aside $100m in venture capital investment to facilitate companies looking to innovate on top of the Watson platform.

“Watson is the solution to today’s influx of information, delivered from the cloud and ready to be the ultimate advisor for faster, more accurate decisions,” said Michael Rhodin, senior vice president of the IBM Watson Group. “By bringing a new generation of Watson-powered services to the marketplace, IBM is transforming industries and professions.”

“These new cognitive computing innovations are designed to augment users’ knowledge, be it the researcher exploring genetic data to create new therapies or a business executive who needs evidence-based insights to make a crucial decision,” he said.

In November the company announced that it was opening up the Watson platform for third party developers to build cloud-based applications which tap into its robust cognitive abilities. IBM said it could hold promise in a range of verticals, particularly health care and banking.

IBM executives said part of the challenge of monetising the platform is that it isn’t currently compatible with many other computing platforms, including the platform deployed by SoftLayer, the cloud computing giant it acquired last year. This was one of the reasons why several high-profile projects developed on the Watson platform fell through last year, and something IBM hopes to rectify as it invests more engineering resources into its development and expands its pitch to companies looking to build more interactive applications capable of making customer-to-business relationships more intuitive.

Cognitive computing takes most technologies used to collect and metabolise big data a step further by making it more immediately actionable, and it is seen by IBM to have massive revenue-generating potential. The company hopes to rake in over $10bn from Watson by 2018.