back to article IBM CEO explains why he offloaded Watson Health: Not enough domain expertise

IBM chairman and CEO Arvind Krishna says it offloaded Watson Health this year because it doesn't have the requisite vertical expertise in the healthcare sector. Talking at stock market analyst Bernstein's 38th Annual Strategic Decisions Conference, the big boss was asked to outline the context for selling the healthcare data …

  1. Anonymous Coward
    Anonymous Coward

    How many MBAs did it take?

    I wonder how many MBAs and executives it took IBM to come up with spin for the CEO.

    1. pimppetgaeghsr

      Re: How many MBAs did it take?

      One to come up with the idea, 5 to nod and agree to the idea, 2 follow up meetings for all involved to then reframe it to make it look like they had input to the idea, then 6 more meetings where each MBA brought their reports up to speed on the current idea and calls for feedback where they take the good ideas and turn them into their own at the finalisation meeting. Another postponement to get <OTHER_MBA_RUN_DEPT> feedback on the idea, a few weeks of delays due to the final idea breaching most of the red tape introduced at last years <BIG_IDEA> at which point everyone agrees the <CURRENT_IDEA> is not that great and they never had anything to do with it to begin with, it was actually all their line reports idea and it would be better to actually just sell off the entire department rather than waste time on ideas to fix it.

      As far as I can see most AI/Machine Learning enterprises and departments are just full of buzzwords and MBAs who banked on it being the next big thing whilst there are no actual engineers to develop any of the products or ideas into a sellable product. Taking a few PhDs and MSc's and have them doodle around implementing this weeks hot AI model doesn't quite so easily turn into free cash flow no matter how many MBAs and product managers you hire from McKinsey or FAANG

  2. TeeCee Gold badge

    ...requisite vertical expertise in the healthcare sector.

    Oooo! Housey housey!!!

    1. Fruit and Nutcase Silver badge

      ...requisite vertical expertise in the healthcare sector.

      So, for the good of the business and the ill people, let's offload it to some Vulture Capitalists who know a thin or two about healthcare, whilst we can still get a billion for this

  3. Pascal Monett Silver badge
    Trollface

    "there's a misalignment"

    Yes, there is. Mostly in the fact that health is vastly more costly and, when you get it wrong, the lawsuits are way higher.

  4. Anonymous Coward
    Anonymous Coward

    Surprise

    Huh. Maybe they should have figured that out before they sank billions into it. I was a humble product manager in IBM and a question I always had to answer with any proposal was "who will sell this?".

    I suspect that the IBM execs, and in particular Ginni, convinced themselves that they were so smart they didn't need to talk to people who knew what they were doing before launching yet another of her "moonshots", buying a bunch of companies that had no real "fit" to each other and branding them as Watson Health, overpromising, underdelivering, underfunding investment, and eventually selling the whole thing at a loss while undermining whatever reputation Watson had left.

    1. Schultz
      Thumb Up

      Re: Surprise

      So, finally, they found out that clinical healthcare is evidence-driven. It's hard to sell AI magic clouds if success requires successful double-blinded studies.

      Better stick to "financial services, advertising, business automation, and video streaming and hosting", where success or failure is hard to measure (it's always the market's fault -- shady, shifty markets). I fully support the IBM management in this and I'll continue to invest nothing into IBM.

    2. GruntyMcPugh Silver badge

      Re: Surprise

      I never understood how the ROI was going to work. Were IBM going to sell cloud versions of Watson 2, on a pay per use basis, or turn up with a shedload of hardware for an on prem version? Neither made sense to me.

      But now, intead of spotting pre-cancerous cells from biopsies, Watson 2 has the unenviable task of matching what people mumble into an intercom to a restricted list of options on a menu. People could order via an app, or using a touchscreen, but for some reason, listening must happen, and instead of paying someone to listen, who can also fetch the food and mop up at the end of the day, they need Watson 2 to do this. Something else I don't get. How is Watson2 cheaper, better, and more useful, and be in a position to reclaim the R&D spends, doing this one thing, listening?

  5. brainwrong

    So much for the future...

    "Watson Order, which is being rolled out at a number of drive-thrus at fast food chain McDonald's to automate order taking"

    That's a bit of a come-down for technology that got so much hype. Is it going to clumsily phrase everything it says as a question like on jeopardy!?

    I just hope I don't end up talking to it when phoning a customer service line.

    1. Robert Grant Silver badge

      Re: So much for the future...

      "Big Mac and fries, please."

      "What is going to give me high blood pressure?"

      1. Fruit and Nutcase Silver badge

        Re: So much for the future...

        Speaking to automated systems raises my BP. So does telephony systems which have cheerful voices - and being repeatedly told my call is important to them. I've just switched my car insurance provider for just that reason

  6. Anonymous Coward
    Anonymous Coward

    Poor old Watson. It dreamed of being a doctor but fell in with a bad crowd and ended up flipping burgers at Maccies. Just say no to jeopardy, kids.

  7. This post has been deleted by its author

  8. Androgynous Cow Herd

    "AI and automation will be "applied to more and more domains."

    First McDonalds...soon we could expand to Popeyes Fried Chicken and eventually Taco Bell as the technology matures...

  9. Anonymous Coward
    Anonymous Coward

    Dinobaby: "I wish I could write this article and keep my job."

    "ZZZZZZZZZZZZZZZZZZZZZZ," the sound of most of the analysts listening to this at Bernstein's 38th Annual Strategic Decisions Conference.

    Notes from a Bernstein analyst Dinobaby's journal who managed to stay awake and had covered IBM for a while:

    1) Does this guy really think we buy this? Nice guy, nice presence, nice face but totally not chief executive officer material. IBM needs a customer-focused kick-butt sales leader again. I wish I could write this article and keep my job.

    2) Didn't IBM without any expertise in the airline industry turn the whole industry on its head by partnering with American Airlines? Something called SABRE? A real-time airline reservation system? Oh, yeah that was when IBM had a sales force that could credibly talk to customers and to a customers highest-level decision makers about their problems ... and development then solved them? Customer driven? I wish I could write this article and keep my job

    3) Didn't this guy and Al Zollar, the newest member of the IBM board, bury Tivoli? What is left of that portfolio? Big Fix? Tivoli framework? Isn't this just Computer Associates under Charles Wang raised from the dead? A Wang-y Krishna? (got to play with that for a while to stay awake) I guess IBM got tired of not curing cancer? I wish I could write that article and keep my job.

    4) McDonalds and IBM: That is quite a pair. A defunct, old restaurant founded in the 40's that still thinks I -- a Dinobaby -- want to buy a Big Mac with fries, (haven't they seen the blood cholesterol levels for us ol' farts?) and a technology company that hasn't done anything truly original and audacious since it shipped mainframe in 60's (and some 70s applications built built on that technology -- see SABRE above)? They deserve each other ... I wish I could write this article and keep my job.

    5) Applications? Would that this guy would talk about something customers care about? What a technologist! Quantum out the kazoo but nothing about real, problem-solving customer applications? Do customers care about "speeds and feeds" or solving problems? IBM needs a "sales"man -- or heck a "sales"woman -- but forget another Rometty though, please! and not another developer from the lab! I wish I could write this article and keep my job.

    Final note to self: I am a Dinobaby that knows too much! Be sure and to not write about any of this above. Instead, write an article that is short on substance and doesn't reflect my knowledge of the company's history.

    To keep my job, I recommend: "Buy IBM."

    That is a much shorter article to write ... and one I have to, to keep my job!

    Dinobaby Analyst

    P.S. Now to catch a few zzzzzzzzz's like all the Gen-XYZers surrounding me.

  10. Alistair
    Windows

    Is Arvind giving the SEC a hint or three here?

    you're going to need doctors and nurse practitioners to speak to the buyers of Watson Health. That's not the IBM go-to-market field force, so there's a misalignment. Ditto in Promontory, you're going to need ex-regulators and accountants to go talk to people worrying about financial compliance. So, that's a little bit different than us."

    I'm wondering if there's more to that statement than appears on the surface. Foot in mouth disease perhaps?

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