New York (CNN Business) Now IBM is selling off its Watson Health assets: IBM said on Friday it would sell healthcare data and analytics assets stored under its Watson Health division to the private company Francisco Partners.
The agreement shows that IT giant IBM (IBM) is backing down from its ambitions in the healthcare sector as it focuses on building computer-aided cloud computing, an effort that has taken place since Arvind Krishna took over as CEO in 2020.
IBM launched Watson Health as a separate business unit in 2015 with the aim of using the data to help doctors, researchers and insurance retailers solve some of the major health care problems. The company has invested in a series of contracts to access health care data, and has taken on challenges ranging from improving diabetes care to improving cancer treatment.
But the betting of the liver did not come out. The Wall Street Journal reported about a year ago that Watson Health made about $ 1 billion a year and made no profit, and that IBM was considering selling the business.
The space for healthcare technology has also become increasingly competitive. Google (GOOGL GOOGLE) in 2019 confirmed a partnership with Ascension, one of the world’s largest nonprofit health systems, to collect and analyze patient health data. Last April, Microsoft (MSFT) spent $ 16 billion to buy AI healthcare engineer Nuance to match its Microsoft Cloud for Healthcare business. And last month, Oracle (ORCL) said it would buy the healthcare software company Cerner for $ 28.3 billion.
“Watson Health sales have long been anticipated,” Paddy Padmanabhan, CEO of healthcare company and technology specialist Damo Consulting, said in an email. “IBM obviously did not find much in the healthcare market while others like Google and Microsoft went further.”
Watson Health was the result of Watson’s great IBM effort, which aims to use artificial intelligence to solve many business and consumer problems – from creating a non-competitive computer to getting sports fans to participate in major events. IBM remains committed to some of its Watson projects, Tom Rosamilia, IBM Software’s senior vice president, said in a statement.
Under Krishna, IBM has been working to transform itself from a legacy IT service provider to a modern cloud business, a strategy developed by its 2018 acquisition of open source software provider Red Hat, Krishna assisted the vendor. The company is making a big game out of the “hybrid cloud” – setting up where companies can use more cloud over local servers. Toward the end of 2020, IBM announced that it had set aside $ 1 billion to invest in other companies in its cloud computing space. A month later, IBM announced the departure of a quarter of the company to focus on the cloud.
The terms of the IBM agreement with Francisco Partnership were not disclosed. The Watson Health management team is currently expected to remain in the new company, according to the two companies.
