U.S. Markets closed

Must-know: Why IBM Watson’s timing is opportune

Anupama Shukla

Must-know: Is IBM on the road to recovery or stuck in transition? (Part 3 of 8)

(Continued from Part 2)

Watson’s timing is opportune

Watson, a cognitive computer system developed by IBM Corp. (IBM), has attracted public attention because of its participation in the game show “Jeopardy” in 2011. Named after IBM’s founder, Thomas J. Watson, it’s a cognitive supercomputer that combines artificial intelligence and sophisticated analytics. In 2014, IBM announced its plans to invest $1 billion in the Watson. The investment formed the Watson group with 2,000 professionals.

The previous chart implies how vast and quickly the world of “Big Data” is growing.

According to Gartner, “Big data is high volume, high velocity, and high variety information assets that require new forms of processing to enable enhanced decision making, insight discovery and process optimization.”

In 2014, Internal Data Corporation (or IDC) research predicts that the market for “Big Data” is expected to reach $16.1 billion, where infrastructure— including servers and storage—commands 45% of the market. It’s the largest and fastest growing segment.

The previous table shows how much “Big Data” contributes towards total revenues of software vendors. Companies like HP (HPQ) and Dell (DELL) have a very small exposure towards big data. However, companies like Red Hat (RHT), an open source software provider, and Teradata (TDC), a provider of analytic data platforms, have considerably higher exposure to data and analytics.

What is Watson?

Watson is a cognitive supercomputer that combines artificial intelligence and sophisticated analytics for its performance. Watson is capable of reading and understanding natural language that can:

• Perceive and interpret sensory input beyond traditional data
• Reason and think through complex problems, deepen analysis, and inspire creativity
• Relate to the communication and personalize interactions
• Learn from interaction and has the possibility of scaling its abilities

With repeated usage, leading to successes as well as failures, Watson uses the feedback from its users. It has dynamic learning capabilities.

Differentiating feature

Watson’s uniqueness lies in its ability to process high volumes of information or “big data” about any area, topic, or subject. It helps users by providing insights about “big data,” without the need for advanced analytics training. It enables them to make highly informed decisions. Its ability to interact in natural language, when unstructured data encoded in natural language make up as much as 80% of the data in the present scenario, highlights why it’s being used to analyze messages on social networks.

Potential usage in industries

Due to its cognitive abilities, hypothesis generation, and evidence based learning Watson would find its usage across an array of industries. However, education, healthcare, and finance are fields that are expected to rapidly adopt Watson.

Continue to Part 4

Browse this series on Market Realist: