RESEARCH TRIANGLE PARK – The CEO and Chairman of IBM, Arvind Krishna, told a conference audience last week that the company’s decision to divest from Watson Health was due to a lack of expertise in the sector.
Paul Kunert reported the story for The Register. He quoted Krishna as telling the audience that the divestment “has got nothing to do with our commitment to AI and to the Watson Brand,” adding that Krishna indicated that the brand will be the “carrier for AI.”
IBM had sought a buyer for parts of Watson Health in 2021, and renewed efforts to find a buyer in early 2022.
Ultimately, the company found a buyer, Francisco Partners, and a deal was announced by IBM in January 2022. Bloomberg News reported at the time that the deal was worth more than $1 billion.
“Today’s agreement with Francisco Partners is a clear next step as IBM becomes even more focused on our platform-based hybrid cloud and AI strategy,” said Tom Rosamilia, Senior Vice President, IBM Software, in January. “IBM remains committed to Watson, our broader AI business, and to the clients and partners we support in healthcare IT.”
The deal was expected to close in the second quarter of 2022.
“Verticals should belong to people who really have all of the domain expertise, they have credibility in that vertical,” Krishna reportedly said at the conference last week. “And so I think that the healthcare companies, people in medical devices, they will have the credibility to carry out how AI is applied to health in depth.”
Instead of focusing on vertical expertise, Krisha reportedly said, the company will work on technologies “that are horizontal across all industries.”
IBM sells pieces of Watson Health business to private equity firm reprtedly for $1B+
Letter to shareholders
Krisha wrote about the company’s strategy in a letter to shareholders earlier this year. “We enter 2022 more strategically focused and more technologically capable,” wrote Krishna.
“We are integrating technology and expertise—from IBM, our partners, and even our competitors—to meet the urgent needs of our clients, who see hybrid cloud and AI as crucial sources of competitive advantage,” Krishna wrote. “And we are ready to be the catalyst of progress for our clients as they pursue the digital transformation of the world’s mission-critical businesses.”
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