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00:00EMILY: THIS IS "BLOOMBERG TECHNOLOGY." I'M EMILY CHANG. IBM HAS PLACED A HUGE BET ON WATSON BEING A BIG PART OF THE COMPANIES FUTURE. IT'S ALL COMING OUT OF THE WORLD OF WATSON CONFERENCE IN LESS VEGAS WHERE CEO GINNI ROMETTY JOINS US NOW. GREAT TO HAVE YOU. GINNI: THANK YOU. NICE TO BE HERE. EMILY: YOU ARE ANNOUNCING SEVERAL NEW ORDER SHIPS TODAY. HOW MANY MORE PEOPLE WILL WATSON TOUCH AS A RESULT OF THESE PARTNERSHIPS? GINNI: WE JUST HAD A GREAT CONFERENCE. OVER 20,000 PEOPLE. I JUST TOLD THE CROWD THAT RIGHT NOW WATSON TOUCHES HUNDREDS OF MILLIONS OF CONSUMERS AND BY THE END OF NEXT YEAR, WE ARE ON THE PATH TO BE A LIEN. YOU JUST MENTIONED SOME OF THE CUSTOMERS WE ARE ORDERING WITH. GENERAL MOTORS COMING OUT IN THE 2017 THE A GOALS AND ONSTAR GO, A PARTNERSHIP WITH WATSON ABOUT USING YOUR TIME IN YOUR VEHICLE AND A PERSONALIZED BUT SAFE WAY. OR WORLD'S LARGEST GENERIC MANUFACTURER -- WHAT WE ARE DOING MAKING THE WHOLE PROCESS AND THE DELIVERY OF DRUGS DIFFERENT WITH WATSON. WE JUST ANNOUNCED LAST WEEK THE WORK OUT AND AVAILABLE QUEST DIAGNOSTICS, WHICH DOES MAKE PRECISION MEDICINE AVAILABLE TO ALMOST EVERYONE IN THE UNITED STATES. EMILY: LET'S START WITH THE GM PARTNERSHIP. RINGING WATSON TO THE ROAD. GIVE US AN EXAMPLE OF HOW WATSON WILL BE POWERING A NEW DRIVER EXPERIENCE. >> KEEP IT SIMPLE -- IT IS INTERACTIVE AND GM HAS GOT IN ABOUT 1.5 BILLION USES OF INFORMATION FROM CONNECTION AND YOU INDIVIDUALLY PERMISSION IN WHAT HAPPENS. THE CAR GETS TO KNOW YOU. YOU HAVE A PRESCRIPTION TO PICK UP, TELL YOU WHERE TO GET OFF EARLY AND WENT TO GET IT, TO PRE-ORDERING AND PAYING FOR YOUR COFFEE TO YOU ARE GOING TO RUN OUT OF GAS, GETTING YOU TO THE RIGHT PLACE AND PAYING AHEAD AT THE PUMP. THIS IS JUST THE BEGINNING AND THERE ARE A NUMBER OF PARTNERS. YOU'VE GOT MASTERCARD AND A WHOLE GROUP BEING ADDED ON. BUT IN A VERY PERMISSIVE WAY. IT CHANGES THAT EXPERIENCE BECAUSE PEOPLE ON AVERAGE SPEND 37,000 HOURS IN THEIR CAR. EMILY: TECH COMPANIES ARE VYING FOR CONTROL OF THE CAR. WHAT MAKES YOU THINK WATSON AND IBM HAVE SOMETHING SPECIAL OTHER COMPANIES CANNOT REPLICATE? GINNI: IN THIS CASE, USING WATSON AND ARTIFICIAL INTELLIGENCE CAN'T REPLICATE IT. THEREFORE, GM HAS DATA THAT CANNOT BE REPLICATED EITHER. ICS PLAYING A ROLE ACROSS MANY DIFFERENT PARTS AND AUTO. WHETHER IT'S DAIMLER CAR TO GO OR WORK WE HAVE DONE WITH HONDA, THIS KIND OF COGNITIVE INTELLIGENCE WILL COME INTO PLAY AND IT'S NOT JUST AUTONOMOUS DRIVING. WE ANTICIPATE AUTONOMOUS DRIVING WITH SUBSTANCE IN THE CAR. IT'S OPPORTUNITY THAT IS OUT THERE AND IT'S ALL DIFFERENT FORMS, YOUR OWN CAR, AND THERE WILL BE A WIDE VARIETY OF WAYS YOU WILL PARTICIPATE FOR TOP EMILY: YOU SAY WATSON IS DIFFERENTIATED BECAUSE EVERY CLIENT GETS THEIR OWN INDIVIDUAL VERSION OF IT. IF I UNDERSTAND IT, IBM WILL NOT OWN OR USE THAT DATA. WHY IS THAT IMPORTANT AND WHAT ADVANTAGE DOES THAT GIVE YOU OVER OTHER COMPANIES PUSHING HARD ON AI? GINNI: AS YOU KNOW, WE HAVE BEEN BUILDING WATSON FOR QUITE SOME TIME. WE HAVE REALLY MADE SOME STRATEGIC DECISIONS THAT MAKE WATSON THE AI PLATFORM FOR BUSINESS AND KNOWING WHAT MATTERS TO BUSINESS. IN EVERY BUSINESS, YOU HAVE ACCUMULATED A LOT OF BUSINESS AND IT IS YOURS. SO SHOULD BE THE COMPETITIVE ADVANTAGE. WE'VE MADE THE CHOICE OF AN ARCHITECTURE WHERE WE WILL BRING DATA AND WATSON AND ALGORITHM AND YOU BRING THAT TO THE CLIENT. THEY DON'T TRAIN THE BASE FORM AND YOU MAKE CHOICES ON THAT. TO A CLIENT, THAT'S EXTREMELY IMPORTANT. THERE'S NOT A CLIENT IN ANY INDUSTRY THAT ISN'T GOING TO HAVE THE BASIS OF THEIR COMPETITIVE ADVANTAGE BE THE BASE OF THAT INFORMATION FOR THIS IS IN MY MIND ONE OF THE MOST IMPORTANT DECISIONS WE MADE. EMILY: YOU HAVE BEEN HARD AT WORK TRANSFORMING IBM AND WATSON IS A HUGE PART OF THAT FOR TRANSFORMATIONS INTACT ARE NOT EASY. GINNI: AND YOU KNOW WE ARE 105. WE ARE THE ONLY ONES THAT HAVE MADE IT THROUGH MULTIPLE TRANSFORMATIONS AND MULTIPLE EUROS OF TECHNOLOGY. THE WORK OF 400,000 AT IBM, YOU'VE SEEN THE STRATEGIC IMPERATIVE. 15% ROSE, 40% OF IBM AND WATSON IS A SILVER THREAD NOT ONLY THROUGH THOSE, BUT YOU WILL YOU IN MANY PARTS OF OUR BASE SYSTEM. MUCH OF WHAT THEY ARE DOING IS PORTING CLIENTS TO THE CLOUD AND WATSON IS A PIECE OF THAT. EMILY: IBM HAS SEVERAL LEG IS AND INVESTORS STILL SEEM TO BE FOCUSED ON THESE LEGACY BUSINESSES. -- SEVERAL LEGACY BUSINESSES. HOW DO WE SEE THEM OVER THE SHORT-TERM AND LONG-TERM? GINNI: I DON'T THINK OF THEM AS LEGACY BUSINESSES. WE THOUGHT WE WERE COMMODITIZING AND BETTER WITH OTHERS BUT THE BUSINESSES WE HAVE OUR ORTON FOR THE FRANCHISES WE RUN. IF YOU LOOK AT OUR TECHNOLOGY SERVICES BUSINESS, THESE HAVE BEEN MODERNIZED MANY TIMES. THEY MAY NOT BE IN GROWING MARKETS, BUT MODERNIZED WHETHER BLOCK CHAIN, MOBILITY COME A SECURITY AND HAVE WATSON BE PART OF THEM. FROM RUNNING THE BANKS OF THE WORLD TO AIRLINES OF THE WORLD, THEY WORK TOGETHER. THE ANNOUNCEMENT AT GM WAS A GOOD PART OF THAT. THAT SERVED AS A PLATFORM AS WE MOVED INTO ONSTAR GO WITH WATSON. SO, THEY ARE RELATED TOGETHER AND THERE ARE TWO DIFFERENT MARKETS AND TWO DIFFERENT GROWTH RATES. BUSINESSES THAT ARE BUILDING A NEW AND NOW CLEARLY AT SCALE AND THE OTHER BUSINESSES ARE CORE FRANCHISES, WHILE THEY MAY NOT BE GROWING, THEY ARE PROFITABLE, SOLID BUSINESSES TOGETHER. EMILY: YOU HAVE RAMPED UP A LOT OF ACQUISITIONS TO HOLD THAT DATA AND BOOST THE POWER OF WATSON. IS THAT A STRATEGY WE SHOULD EXPECT TO SEE CONTINUE? GINNI: YES. WE'VE DONE A GOOD NUMBER OF ACQUISITIONS. HOW WE LOOK AT THEM IS AN EXAMPLE FOR WATSON HEALTH. THAT'S AN INDUSTRY THAT WOULD BENEFIT TREMENDOUSLY FROM DATA. YOU HAVE SEEN WAYS TO TRAIN WATSON, SO THAT IS ALL FOR WATSON HEALTH. WHICH IS THE WORLD MOST EXPERT GROUP IN FINANCIAL SERVICES. HE WILL BE TRAINING WATSON AS WE LAUNCH WATSON FINANCIAL SERVICES. YOU ARE REALLY CHANGING INDUSTRY THAN CHANGING PROCESSES.

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IBM's Rometty: How Watson Stacks Up Against Competition

Ginni Rometty, IBM chair and chief executive officer, discusses how Watson stacks up against the competition with Bloomberg's Emily Chang on "Bloomberg Technology." (Source: Bloomberg)

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