To add needed corporate revenue and profit, IBM invented a new market by combining its Watson computing innovation with cloud, security and engagement services, and healthcare business expertise to form the IBM Watson Health business unit. IBM plans to resolve underlying complexity and inefficiencies in healthcare while promoting better security and regulatory compliance.

The field of healthcare and life sciences faces tremendous challenges in connecting research data to changes in human behavior that will result in better health. Through curated and compliant flows of insights, IBM hopes to enable interaction across all players — from pure research organizations to pharmaceuticals,healthcare providers, payers and consumers. IBM will offer a stack of technology and services to theecosystem of players and monetize the solutions, partnerships and content those players develop.

While institutions across the technology landscape such as Google, GE, Accenture, Dell, HP and McKesson are working on innovations in the healthcare field, IBM is uniquely positioned through its cognitive computing innovation to help humans consume, derive insight from and act on an overwhelmingly vast and growing body of data and knowledge. Matched with IBM’s ability to invest in and validate a diverse ecosystem of partners, the new Watson Health business unit has the opportunity to make true change to human health and help IBM stay at the pinnacle of the technology industry.

Conventional challenges of product development, innovation management, marketing, sales, partner management and ecosystem support are table stakes in this market, where the biggest challenge remains sustaining the level of investment required to build out the promise of cognitive computing. Under the overall leadership of Senior Vice President Mike Rhodin, who runs the IBM Watson business, Watson Health will enable better health outcomes through technology, services and partnerships.

New Watson General Manager

IBM announced the appointment of a new Watson Health general manager, Deborah DiSanzo, and a chief marketing officer, Bill Evans. These announcements and investments signal the shift from a research prototype into a solid business. Rhodin announced “Watson Health is hiring,” and TBR believes the headcount in the unit will jump dramatically in coming months. ‘We’re not just getting started; we’re well on our way’

IBM’s launch of the Watson Health unit in April came with a flurry of new alliance, acquisition and organizational announcements, but culminated several quarters of steady promotion of Watson use cases for healthcare clients. IBM held its Watson Health event on Sept. 10, 2015, at the unit’s new headquarters in Cambridge, Mass., which will house more than 700 of the planned 2,000 dedicated Watson Health employees. Rhodin kicked off the event with an update on the integration of partner and purchased technologies into new Watson-enabled offerings. For example:IBM Watson Care Manager combines patient engagement tools from Phytel with Apple’s HealthKit and ResearchKit frameworks to enhance population health and care managementwith personalized data from connected device users who opt in.

With Watson Analytics, and Explorys’ massive database of anonymized patient records, researchers, payers and providers can identify the highest-cost healthcare users. Leaders from technology partners Medtronic, CVS Health and Modernizing Medicine were also on hand to discuss how their collaborations with IBM Watson Health were progressing. With use cases spanning medical devices, pharmaceutical companies and providers, IBM succeeded in demonstrating the power of the Watson Health platform to drive outcomes for healthcare clients.

Former Philips Healthcare CEO DiSanzo’s 30 years of healthcare and technology industry experience will bolster IBM’s efforts to grow the Watson Health unit globally. TBR also interacted with IBM executives, ecosystem partners and clients one-on-one and viewed exhibitions and demos of solutions built on Watson Health offerings.IBM targets healthcare providers by enabling better health outcomes, with the broader industry (including payers) benefitting from reduced healthcare costs.

Though representatives from payer clients were conspicuously absent from the event, a running theme was empowering providers to reduce healthcare costs, improve health outcomes and enhance the consumer experience through better informed treatment plans and patient engagement tools. Like payers, regulatory reforms and new government mandates pressure provider organizations to streamline clinical and administrative workflows while also eliminating errors and enhancing outcomes.

However, despite the overwhelming business case for transformation, TBR’s conversations with some of IBM’s competitors in the healthcare IT services space highlight the difficulty in selling next-generation technology solutions to providers due to their smaller budgets and attachment to legacy systems. IBM Watson Care Manager and Modernizing Medicine’s schEMA mobile application (powered by Watson and funded by IBM) target healthcare providers directly with powerful analytics tools, reinforcing IBM’s status as a market maker. IBM’s partnerships with CVS Health and Medtronic and acquisitions of Explorys and Phytel enable IBM to reach providers through the platforms and networks they already use.

Emphasizing patient participation

IBM will continue to encourage providers to take a proactive approach to technology transformation by emphasizing patient participation in care plans between appointments, coordination with payer and pharmacy systems, and accelerated, evidence-based treatment decisions using Watson’s cognitive computing power. We expect IBM, consistent with its overall go-to-market approach in IT services, to continue to focus sales efforts on large-scale integrated delivery systems, while the Explorys and Phytel acquisitions and investments in startups such as Welltok and Modernizing Medicine that build mobile applications on the Watson Health Cloud platform will improve access to smaller provider offices and consumers.

Security features built into Watson Health Cloud remove regulatory compliance as a barrier to cloud adoption for life sciences clients According to TBR’s 1H15 Hybrid Cloud Customer Research, “The compliance-heavy nature of the healthcare industry and the cost and risk of transferring sensitive data to the cloud make hybrid cloud adoption a long-term process.” With IBM Watson Health Cloud for Life Sciences Compliance, IBM positions itself to accelerate this process by breaking a key regulatory barrier preventing life sciences companies from moving workloads related to clinical trials and product marketing to the cloud. IBM proactively qualified the solution’s infrastructure and applications under the Food and Drug Administration’s stringent GxP regulations, shortening the process to validate a new IT system from a few months to a few hours.

Will run on the SoftLayer infrastructure

The solution will run on IBM’s SoftLayer infrastructure, but clients have the choice of bringing their own qualified server images or provisioning validated resources from IBM. IBM will also offer automation and managed services (staffed by trained personnel working under the guidance of IBM’s Life Sciences Global Regulatory Center of Excellence) to ease more arduous compliance tasks such as documentation. We expect IBM to develop similar managed services offerings around HIPAA compliance in the coming months, as the company looks to expand its infrastructure solutions for healthcare payers and providers. New collaborations expand the global reach and medical breadth of IBM’s research and clinical enablement platforms IBM continues to attract top-tier medical research organizations to its Watson Health solutions, announcing several new and expanded partnerships at the event that broadened the scope of medical specialties addressed by Watson:

IBM built on its relationship with Boston Children’s Hospital, integrating the Watson library of medical literature and cognitive analytics capabilities into the OpenPediatrics cloud-based education platform, a nonprofit initiative the two companies launched in September 2013 to provide open access to pediatric medical knowledge to caregivers across the world.

  • Columbia University Medical Center’s departments of Pathology & Cell Biology and Systems Biology will test IBM Watson Genomic Analytics for use in creating personalized cancer treatments from DNA insights.
  • Ireland-based clinical research organization Icon plc will apply Watson Clinical Trial Matching, Watson Health Cloud and anonymized patient data from Explorys to accelerate patient recruitment for clinical trials around breast, lung, colon and rectal cancer treatments.
  • Sage Bionetworks will build its Open Biomedical Research Platform on Watson Health Cloud to facilitate large-scale pooling of Apple ResearchKit data and collaboration across global research teams to accelerate medical research in areas such as breast cancer and Parkinson’s disease.
  • Teva Pharmaceuticals will leverage Watson Health Cloud and resources from IBM’s Global Business Services and Research units to develop analytics solutions that improve care for patients with chronic conditions such as asthma and migraines.

These announcements follow earlier collaborations and engagements with New York Genome Center, Memorial Sloan Kettering Cancer Center, Mayo Clinic, Bumrungrad International Hospital and the U.S. Department of Veteran Affairs that showcase Watson’s growing traction in the healthcare space. Though the revenue IBM generates from these engagements is unclear, the company benefits from increased brand exposure in healthcare microverticals and access to valuable data streams that improve the quality of Watson’s health insights.