International Business Machines’ (NYSE: IBM) cognitive-computing system Watson has been initially targeted in the healthcare sector as it is being utilized to aid in diagnosis and decision-making of medical professionals.
IBM Watson can analyze massive amounts of data such as research journals and medical records that can provide doctors with guidance and help improve patient outcomes.
Now, the next target of the multinational tech giant for Watson is the financial services industry. Last month, IBM reported that it considered to purchase the risk management and regulatory compliance consulting firm Promontory Financial Group for an unspecified amount. The 600 professionals of the firm will train IBM Watson to aid its clients in the complex regulatory environment.
Acquiring Promontory can help improve the process of training IBM’s cognitive computing system to address the regulatory burden that financial companies have to face. Aside from that, it can advance the transformation of the tech corporation into a cloud and cognitive solutions firm. This fast growth in cloud computing has prompted IBM to transform itself, but its primary focus is still on catering enterprise clients and coming up with solutions to specific problems of its customers.
IBM’s purchase of Promontory just shows that artificial intelligence systems are nothing without skilled and knowledgeable professionals. In the healthcare sector, IBM Watson is a tool that can help doctors make better decisions, and does not necessarily serve as a replacement. In the financial services space, the cognitive computing system will supplement the expertise of Promontory.
The multinational tech company’s approach of purchasing companies with great knowledge and expertise in certain areas is very reasonable. Earlier this 2016, the company announced that its purchase of Truven Health Analytics. Through this deal, IBM obtained a huge amount of data and thousands of skilled professionals.
The purchase of Promontory brings the similar benefits to IBM and allows the company to apply Watson to other fields.
The tech corporation has previously said that it intends to transform the cognitive-computing system into a $10 billion business by the year 2020. Though the multinational technology company may have been overly optimistic, the potential for Watson to become one of the primary sources of revenue is realistic.
The company has not yet reported how much revenue IBM Watson contributes, probably because the data is not yet stellar. However, it should be noted that the strategy of focusing on solving specific problems in certain industries is sound.
The acquisition deal with Promontory Financial Group is another step towards the correct path.