IBM Thinks Watson In Cognitive Mode

Thinking has always been part of International Business Machine’s (IBM) history. It has been embedded in the big blue’s culture since its architect, Thomas J. Watson Sr., first introduced 'THINK' as an IBM slogan in the 1920s. Since then IBM has always made us 'THINK'. For decades, IBM distributed small notepads with the word 'THINK' inscribed on them. In April 1992, IBM announced the first ThinkPad tablet computer which set a new standard for design and innovation in the space.

Many years later, IBM is still thinking. It is now thinking at a pace which is much faster and at a scale that is much higher. Welcome to IBM Watson – a technology platform that uses natural language processing and machine learning to reveal insights from large amounts of unstructured data. It can answer your customers’ most pressing questions; quickly extract key information from documents and reveal insights, patterns and relationships across data.

In fact, IBM today is taking its power of thinking even further by transforming itself from a hardware company to a cognitive solutions and cloud platform company. “In doing so, IBM is pioneering new business opportunities beyond the traditional IT marketplace,” Ginni Rometty, IBM chairperson, president and chief executive officer, said while announcing the second quarter (April-June) earnings for 2016.

“In the second quarter, we delivered double-digit revenue growth in our strategic imperatives, driven by innovations in areas such as analytics, security, cloud video services and Watson Health, all powered by the IBM Cloud and differentiated by industry. And we continue to invest for growth with recent breakthroughs in quantum computing, Internet of Things and Blockchain solutions for the IBM Cloud,” she said.

IBM’s cloud revenues (public, private and hybrid) for the second quarter increased 30 per cent to $11.6 billion over the trailing 12 months. The run rate for cloud as-a-service revenue, a subset of total cloud revenue, increased to $6.7 billion from $4.5 billion in the second quarter of 2015. Revenues from analytics increased five per cent.

For IBM, the pickup in global demand for cloud, evident in the quarterly earnings numbers, is also true of the India market. “The concerns about security, reliability, and latency etc. no longer exist. We can see month to month improvement on this,” says Chetan Naik, VP-Sales, India/South Asia, IBM.

IBM feels cloud can be equally relevant for both startups and large enterprises. “Initially most of the startups prefer cloud as it helps them get off the ground faster as they are unable to anticipate their need for the infrastructure,” adds Naik. But it makes a lot of sense for enterprises too. “If you are a B2C internet company, it makes a lot of sense to start on cloud. The same is the case for a B2B company. If you are a very large enterprise, a large retailer or consumer company, you may have a journey of setting up your systems. But the newer systems, you can directly put onto the cloud. You continue to get more out of this. We have offerings called bridge to cloud, precisely for this. As you move things to the cloud, we can sit with your team and see how to prioritise, feasibility etc,” he says.

While IBM does not disclose numbers for Watson separately, it typically falls under cognitive, says Prashant Pradhan, head of IBM Watson, India and South Asia. “If you look at a typical good cognitive project, it will have elements of cognitive, analytics, big data as well as Watson.”
IBM’s revenue from cognitive solutions (including solutions software and transaction processing software) was up 3.8 per cent to $4.7 billion, while cloud revenue within the segment grew 54 per cent during the second quarter. The growth in the solutions software segment was driven by analytics (including Watson) and security.

In stark contrast to its admirable growth in cloud and analytics, revenue from IBM’s systems (including systems hardware and operating systems software) was down 23.2 per cent to $2.0 billion. The dip in its hardware business is a clear pointer to the rationale behind the company’s shift in strategy to cloud and cognitive thinking.

Watson In India
The opportunity for cognitive computing to transform businesses is huge in a country like India, which is unique in terms of the sheer size of its population and the diverse and unstructured data it generates. Many companies have started to experiment with such technologies, but have only scratched the surface yet. “Watson is seeing strong traction across verticals such as healthcare, financial services, telecom, consumer, government, and education,” says Pradhan.

In December 2015, IBM announced that Manipal Hospitals had adopted Watson for Oncology in the first Watson engagement in India. The cognitive solution, developed by IBM with experts at Memorial Sloan-Kettering Cancer Center, is known to help clinicians analyse massive amounts of data to identify personalised and evidence-based treatment options for the 2,00,000 cancer patients who receive care at Manipal facilities each year.

“In a country like India where there is massive data, it’s a good fit in technology. The rate at which cancer is growing and our ability to provide trained oncologists, it’s a scale and capacity issue. Cognitive is fundamentally a very good fit for India because it is designed for that type of capacity,” says Pradhan. “We see great opportunities from the startups. Ola, Uber will need it in future. In terms of uptake, it all depends. In terms of adoption, startups will definitely take a call whether they will attempt to do their own AI (artificial intelligence) or will use pre-existing technologies already available,” he says.

Analysts opine that Watson still had a long way to go in the India market. “While globally, IBM’s Watson can hold some merit, IBM in India needs to do a lot of re-skilling and internal learning before it can do any justice to Watson. The Indian ecosystem – both IBM and customers – is not yet prepared to adopt Watson,” says Sanchit Vir Gogia, chief analyst and CEO, Greyhound Research.

IBM is hard selling Watson, both globally and in India. It wants its customers to think Watson in the same breath as IBM. And no doubt, Watson does hold a lot of potential in solving customer problems through its advanced analytics capabilities. But the commercial success of Watson in India may still be some distance away as the Watson team needs to work in tandem with end-user organisations to install Watson and teach them domain expertise. A mature and ready ecosystem is required if the true potential of something like Watson is to be unleashed. Till then, Watson is a promising concept that needs to be worked upon.

ayushman@businessworld.in
@ayushmanb