IBM explores sale of $1 bn Watson Health business

IBM is likely to sell its Watson Health business that is generating nearly $1 billion in annual revenue but is not profitable, The Wall Street Journal reported.
IBM Watson analyticsThe report said IBM is exploring a potential sale of its Watson Health business, as CEO Arvind Krishna moves to streamline the company and become more competitive in cloud computing.

Watson was one of IBM’s highest-profile initiatives in recent years and a big bet on the growing healthcare sector, though results disappointed in part because physicians were hesitant to adopt artificial intelligence.

IBM is studying alternatives for the unit that could include a sale to a private-equity firm or industry player or a merger with a blank-check company.

IBM currently has a market value of $108 billion, way behind Cloud-computing rivals like Amazon and Microsoft.

In its fourth quarter, cognitive applications revenue, which includes Watson Health, came to $1.5 billion, a decrease of 2 percent year over year.

IBM Watson was one of the strategic imperatives under former CEO Ginni Rometty.

Cloud and Cognitive Software sales dropped 5 percent to $6.8 billion. Last quarter, this segment was up 7 percent.

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