IBM’s natural language processing artificial intelligence platform, Watson, may not be the miracle technology that the company hopes will give Big Blue the edge in cloud and big data processing, a recent blog post has claimed.
Figures purportedly leaked from within the company and published in a blog post on US investment research site, Seeking Alpha, allege that only 500 customers have so far registered to try out Watson – lagging 94 percent behind IBM’s internal targets of more than 8,000 clients.
The same numbers suggest that the number of partners that have embraced Watson are 92 percent behind the 2016 target of more than 4,000.
The numbers can't be confirmed, and it is worth pointing out that the writer, Robert X Cringely, has long been a staunch critic of IBM. Following a Forbes article last year, in which Cringely claimed IBM was set to cut 112,000 jobs, Big Blue came out with an uncharacteristically candid response, saying the speculation from the "industry gadfly" was "stupid" and "ludicrous".
CRN made repeated attempts to contact two of IBM Australia’s senior spokespeople via email and phone calls in an attempt verify the authenticity of the Watson figures and to seek comment, but calls and emails went unanswered.
A detailed breakdown of what Cringely called "very real internal IBM numbers", which he claimed he “came into possession of”, paint a troubling picture for Watson. IBM chairperson and chief executive Ginni Rometty has championed the technology as one of Big Blue’s biggest differentiators from its rivals – particularly in the cognitive learning and cloud computing space.
The Watson supercomputer rose to prominence in 2011 when it won the American game show Jeopardy.
IBM’s Watson chief technology officer, Robert High, has touted the technology as an artificial intelligence platform that can crunch through vast amounts of data in such a way that it can understand problems and environments in the same way as humans.
The company believes that by opening its APIs to clients and partners they can teach Watson learn and understand industry-specific knowledge in a context sensitive way that lets them solve complex problems.
Underperforming
With just over two-thirds of 2016 now behind IBM, Cringely described Watson’s sales performance as “dismal”.
“For a program that is at least three years old, this level of sales performance is dismal. If only eight percent of the companies that are supposed to be selling Watson have even minimal experience with the technology, it's difficult to say it is even broadly available. Certainly, cloud-like sales increases of 30-plus percent per year aren't happening for Watson,” Cringely wrote.
IBM’s latest results for second quarter announced late in July indicated that its sales have been in decline for 17 quarters in a row as internet-delivered services continue to push into the technology industry iconic stalwart’s home territory.
IBM reported that its earnings had fallen to $US2.5 billion for the quarter compared withto $US3.4 billion in the previous corresponding period a year earlier.
Its overall revenue fell 2.8 percent to $US20.24 billion, however that bettered market expectations and its share price climbed marginally to $US164.
Analyst responses to IBM’s performance have been mixed with some praising its overall performance in consistently bringing its share price movement out of negative territory since March.
At the time, Rometty attributed most of that to investment in cloud, security and applications of Watson in the health industry.
However, Cringely argues that IBM is asking too much of Watson for its turnaround story and the overall success of its CAMSS (cloud, analytics, mobile, social and security) strategy.
“Can IBM make more than $20 billion in revenue from cloud? Can IBM make more than $20 billion from Watson/analytics/cognitive? Can IBM make more than $20 billion each on security, mobile, and social?
"What if IBM can only make $20 billion on security, mobile, and social combined? Then, IBM needs to make $40 billion on cloud and another $40 billion on Watson/analytics/cognitive. Remember Amazon's AWS is already close to being a $10 billion-per-year business. Is it reasonable for IBM to grow to twice AWS's size? No. It'll be lucky to reach half the size of AWS,” he said.
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