Editor’s note: Matthew Casey is an Analyst with Technology Business Research.

HAMPTON, N.H. – “Watson’s” logical evolution continues, with IBM (NYSE: IBM) formalizing a business unit to improve the company’s positioning as an outcomes-based vendor.

The new unit was announced Thursday.

The formation of a dedicated Watson business unit and subsequent investments in the suite (announced on January 9, 2014) further indicate IBM’s intent to transition from an outsourcing company to an outcomes-based vendor, a transition that TBR expects will happen over the next two years. Commercialization of Watson is the next logical step for IBM, based on the company’s investment in the platform to date and the increasingly disruptive nature of cloud. However, this will be a challenging task considering the cost and complexity to the end user of adopting Watson technologies.

With assets in place, including continued chip innovation, foundational analytics tools and vertically oriented services lines, Watson represents IBM’s efforts to leverage these various capabilities into outcomes-based solutions. Beyond near-term technological cachet and long-term revenue opportunities, Watson provides a simple and scalable interface to deliver on IBM’s “Fast, Easy and Smart” value proposition, which will ultimately help IBM accelerate and elevate the value achieved from its analytics and services-oriented business lines.

In addition to $1 billion in investments and more than 2,000 dedicated employees, the formalization of partner developer communities and opening of Watson APIs will enable IBM to continue vertically integrating the suite and make the value Watson demonstrates in live use cases and demos more accessible to end users.