This Week Health

IBM Watson in healthcare will be a case study for the next century in business schools. It is a textbook case of what not to do when entering a market. Today ends the odd journey of IBM Watson in healthcare. Not that Watson is gone, it just has new ownership. Will this be a good thing? Most likely. We will have to keep an eye on this.

Transcript

Today in health, it Watson is finally sold. So let's try to understand what all this means. My name is bill Russell. I'm a former CIO for a 16 hospital system and creator of this week and health it a set of channels dedicated to keeping health it staff current. And engaged. We want to thank our show sponsors who are investing in developing the next generation of health leaders.

Gordian dynamics, Quill health tau site nuance, Canaan, medical, and current health. Check them out at this week. health.com/today. We have a webinar this Thursday, one I'm excited about. We're going to talk to people from the front lines of the cybersecurity battle that is going on in healthcare. These are first responders. The title is stories from the trenches.

They're going to explore what they're seeing as we explore one of the biggest targets in healthcare active directory. Join us this Thursday at 2:00 PM Eastern time. Sign up today at this week. health.com/trenches. Alright, today's story. Thus ends one of the most confusing journeys into healthcare that we have ever seen. Watson health.

Is gaining new ownership and new direction. And hopefully. A direction that is more grounded in reality. Let me give you a couple of excerpts from the story. Let's see, we took this one from healthcare it news IBM to sell Watson health assets to Francisco partners.

The deal with the private equity firm is a clear next step as IBM becomes even more focused on our platform based hybrid cloud and AI strategy said a big blue exac. So IBM on Friday, announced the deal with bay area based Francisco partners to sell off healthcare data and analytics assets from its Watson health business. Financial terms with deals were not disclosed. Bloomberg reports, price sag.

sale in the second quarter of:

Health insights, market scan, Micromedics social program management and other imaging and radiology tools. The agreement will create a new standalone company that will continue serving existing clients in provider imaging, life sciences, payer, and other healthcare clients, according to IBM. And for the Cisco partners.

With more than 30 billion in assets and two decade. Lists of investments in hundreds of technology companies, the private equity firms, current and past. Investments in the digital health sector include firms such as Availity. Capsule . Good RX trellis. And Zoc doc partnering with corporations to execute divisional carve-outs has been a core focus of Francisco partners said Justin Chen principal at Francisco partners in the statement.

We look forward to supporting the talented employees and management team so forth and so on. You get the picture. , let's keep going. Watson was the subject of a lot of early hype, of course, with not a few big promises about its potential for AI powered clinical decision support. And over the past decade, IBM has spent billions scooping up businesses.

Merge healthcare. Phytel Exploris Truven health analytics. And others to build out the Watson health portfolio, but recent challenges have been well-documented. And now it's up to Francisco partners to find profitability from those datasets. And analytics technologies. IBM. Meanwhile has been loudly signaling its intent to shift, focus towards what it sees as a $1 trillion hybrid cloud opportunity.

ion acquisition of red hat in:

And freeing up other assets that haven't been paying dividends in the healthcare space appears to be the next step in the pursuit of this goal. The AI space has been evolving and the industry leaders have invested in harnessing data and generating insights and new and innovative ways, especially with cloud-based model said, Patty pad.

Matt IBAN CEO of Dame-o consulting, who has been a guest on the show, selling off the data assets essentially means an end to Watson health experiment. However, it may allow IBM as an organization to refocus and redevelop a new approach to healthcare. He added. We'll look at that in a minute. 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. If IBM does nothing else. They get the storyline. They make sure everyone has the storyline and they repeat it over and over again. So, and we're going to repeat it for them as well, because I think it is absolutely where they're going. IBM remains committed to Watson our broader AI business and the other clients and partners.

We supported healthcare. It, he added through this transaction. For instance, go partners, acquires data and analytics assets that will benefit from the enhanced investment and expertise of a healthcare industry focused portfolio. All right. So that is the story. As, you know, with all these stories, I try to do a, so what, and I try to come back and say, what does this mean for us in healthcare? It.

Okay. IBM needed a reboot, no doubt about it. They lost their focus. And because of that, they had way too many messages in healthcare and it was really confusing. Now they want your cloud business clarity and focus good for them. Unfortunately, for them. They're way behind Microsoft. Google, AWS are all well ahead. Oracle is trying to buy their way into this game. With the Cerner acquisition. IBM has focused. The question becomes, do they have any differentiation?

I don't see it, but perhaps someone from IBM can educate me on why I would have utilized their cloud in healthcare over other players. Okay. Let's look at it from the other. Direction before we come into healthcare, it space. Great purchase for Francisco partners. Don't get too enamored with the jeopardy champion computer while it is interesting. It is not where the value of this deal is derived.

I believe the data assets alone have close to this valuation, the billion dollar valuation. They then get advanced analytics and a bunch of other tools. This fits nicely into their portfolio of companies and has the potential to unlock value. And some of the other operating companies, IBM takes the black guy and they can rebrand these assets and unlock value in healthcare.

So, what does this mean to us? What does this mean in healthcare? It, I guess it depends. If you're a client, if you're a client, I would get together with them immediately and ask them, what does this mean for me? If you're a client of Watson. You might actually be better off. I, I'm not sure of that. I would have to ask a lot of questions, but you might be better off.

If you are a client of IBM's, you've probably already heard their cloud pitch and they were probably listening to their cloud pitch. I'm always concerned with the IBM's and the Oracles of this world. , publicly traded companies with, , big numbers. They have to hit every quarter. And so unless there's some significant value that I can't get somewhere else.

I try to avoid those players that I know have to drive. These valuations. Whenever possible. So that's one thing. , the next thing is if you're not a client, I would keep an eye on. On the frame on Francisco partners and the acquisition of these assets. It could be an interesting turn.

, the leadership might be more focused. The message might be more focused. And it might be in the hands of people who want to be in health care and understand how to be in healthcare. And how to really work with the data assets. So that's something I would definitely keep an eye on. That's really all I have for this one. We're going to have to see this play out a little bit, have a few more conversations before we can make any real conclusions, but definitely something to keep an eye on.

That's all for today. If someone that might benefit from our channel, please forward them a note. They can subscribe on our website this week out.com. Or wherever you listen to podcasts, apple, Google, overcast, Spotify, Stitcher, you get the picture. We are everywhere. We want to thank our sponsors who are investing in our mission to develop the next generation of health leaders. Gordian dynamics quill health tau site nuance canon medical and ???? current health check them out at this week health.com/today. thanks for listening that's all for now

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