Editor’s note: Geoff Woollacott is Senior Analyst/Engagement Manager and Bryan Belanger is Professional Services Practice Analyst at research firm Technology Business Research. This is the second of a three-part analysis of IBM’s (NYSE: IBM) plans to exploit business opportunities based around its “Watson” program.

HAMPTON, N.H. - Watson represents the big bet, and the continued evolution of both Watson and the attendant technologies built 
on and around its capabilities keep paying off, as evidenced by IBM’s announcement it had increased the 2015 goal for big data related revenue from $16 billion to $20 billion.

Furthermore, the ability to market increasingly affordable cognitive computing solutions is the equivalent of Moore’s Law, and has enabled IBM to scale the core set of Watson technologies to create offerings at price points that address broader swaths of the IT market landscape.

Watson Engagement Advisor is positioned as a call center support tool that uses Watson’s cognitive natural language processing analytics capabilities to enhance data-driven customer engagement. The solution offers two core functionalities: a decision support mechanism for agent-based call center services and a direct customer service tool that allows customers to interact with Watson applications on mobile devices.

As part of the announcement, IBM unveiled plans to offer the Watson Engagement Advisor as a cloud service hosted within IBM data centers as well as an on-premises solution. Ultimately, IBM plans to “embed” Watson in enterprises, offering firms the opportunity to access the technology in an “as a Service” architecture to buildindustry-specific applications. IBM noted that it has drastically reduced the physical capacity of Watson system, boosting its ease of commercialization for enterprises preferring on-premises deployment. IBM has initially allowed only firms in an early customer program, which includes ANZ, Celecom, HIS, Nielson and Royal Bank of
Canada, to test Watson Engagement Advisor.

TBR believes there are three distinct value drivers that will ensure aggressive adoption of the Watson Engagement Advisor and future commerce-focused solutions based on the Watson technology:

(1) Differentiated Technology: Watson has vaulted IBM to the position of market maker in cognitive computing.

As consumer preferences and IT consumerization require increasingly personalized approaches to customer engagement, enterprises will seek analytics technologies that can place structured and unstructured data in context. Watson’s cognitive ability ensures it builds value over time and creates context, versus traditional programmable systems where value erodes over the adoption life cycle. As a market leader, introducing Watson for customer service gives IBM a first-mover advantage over peers in leveraging cognitive technology
to deliver customer-centric business outcomes.

(2) Scalability: TBR believes the ability for enterprises to access Watson “as a Service” to build industry-specific solutions is pivotal to the growth trajectory of the offering. While the initial Watson Engagement Advisor solution will transform customer service and call center operations, it offers a limited scope in its impact on the overall customer engagement continuum, which spans buy, market, sell and service. By accessing Watson on the cloud, IBM consultants, researchers, partners and clients will have the flexibility to customize the
technology into specialized solutions, boosting the scope of the solution.

(3) Business Cases: The commercialization of Watson in financial services and healthcare has created tangible use cases that IBM can use to pitch the Watson Engagement Advisor and other future cognitive-based solutions to Smarter Commerce clients. In healthcare, for example, IBM’s Watson solutions created with WellPoint and Memorial Sloan-Kettering are used by 90% of nurses and have reduced time to market for new cancer therapies by 75%. These use cases demonstrate tangible business value generated by Watson implementation and will help IBM convince Smarter Commerce customers of the business value of the Watson Engagement

Part Three: Stitching IBM Analytics technologies into the fabric of the business via simple manipulation and output consumption improves speed of deployment.