Watson Set to Become `Huge Engine' for Sales, IBM Executive Says

IBM's Watson Said to Become 'Huge Engine' for Sales
  • Waston unit could reach $1 billion in sales in near-term
  • More than 77,000 active developers using Watson platform

IBM’s Watson will be a “huge engine” for the business going forward, according to John Kelly, the company’s senior vice president for solutions portfolio and research.

The Watson unit -- called cognitive computing -- could reach $1 billion in sales in the near-term, he said, without specifying the time frame. Watson is the fastest growing part of International Business Machines Corp.’s analytics business, he said. Those operations brought in about $17 billion in revenue last year, or about 18 percent of sales. Watson is already incremental to the business, Kelly said in an interview.

“Incremental means it’s above our base business, which are core existing businesses -- all new,” Kelly said. “As soon as possible, it will be very material to IBM.”

To attract more developers to the Watson platform, IBM is announcing new services and tools to help build applications that use cognitive computing. These moves are part of IBM’s effort to sell more data-analytics and cloud-computing technology as demand for older services weaken, leading to revenue declines and divestitures. The company is also focusing on selling Watson products into areas such as education and healthcare.

“It’s a whole new era of computing,” Kelly said. “We feel the urgency not only to turn around the business of IBM and help the business of IBM, but help our clients transform their industries.”

More than 77,000 active developers are using Watson tools through the company’s Bluemix cloud platform, which means they’ve used the services within the past 30 days, Stephen Gold, vice president for Watson, said in a separate interview. IBM said 100 companies are now selling products that were built using the Watson developer platform. In these agreements, IBM gets a share of the revenue after the projects are brought to the market, Gold said.

“We have a vested interest in their success,” he said. IBM is “working with them to go to market -- facilitating introductions, lending our brand to the business.” Gold didn’t specify Watson revenue expectations, noting that the company doesn’t break out the unit from its analytics business.

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