IBM CEO Says Watson Stands Out by Protecting Clients’ Data

Rometty sees proprietary data combined with AI as the competitive advantage for companies going forward.


October 27, 2016

3 Min Read
IBM's Ginni Rometty
IBM CEO Ginni Rometty and Senior Vice President Mike Rhodin (Photo: Jon Simon/Feature Photo Service for IBM)

(Bloomberg) -- IBM Chief Executive Officer Ginni Rometty sees proprietary data combined with artificial intelligence technology as the competitive advantage for companies going forward.

When International Business Machines Corp. works with clients, it trains a unique version of its artificial intelligence technology, Watson, using proprietary data, and that information creates individual business insights that stay with the customer, Rometty said. That’s how Watson is different from its competitors that offer similar services around data analytics and machine learning, she said Wednesday in a speech at the company’s World of Watson event in Las Vegas.

“We made an important architectural decision -- for all our clients, all their data, it’s their accumulated knowledge,” she said. “It’s your data, not someone else’s. It’s your intellectual property, not someone else’s. It’s your competitive advantage from all this data, not someone else’s.”

Rometty said clients have praised IBM’s approach. She envisions a future in which all enterprises will add artificial intelligence to help automate business processes, improve productivity and increase sales -- and will turn to IBM to provide that AI software. Watson is seen as the key driver to long-term growth at the Armonk, New York-based company, which has been struggling with declining older businesses in traditional license-based software and information technology services. Watson is contributing to these existing operations, Rometty said in an interview.

IBM hasn’t yet broken out Watson revenue, which is housed within analytics sales under its cognitive solutions segment. That division reported $4.2 billion in sales in the third quarter.

IBM is competing with large technology companies including Microsoft Corp. and Alphabet Inc. to sell more machine learning and data analytics tools, which is why it’s working to differentiate its AI services. The company doesn’t have any consumer-facing products in artificial intelligence and is only focused on serving an enterprise’s needs, Rometty said, meaning it doesn’t require clients to share data to use Watson services.

“We have no search legacy,” Rometty said in the speech. Google, for example, uses huge amounts of data it has collected over the years to improve its core advertising product.

While the core Watson technology isn’t trained using customers’ proprietary data, it has received large chunks of information in various industries, from health care to weather to financial services, she said. That data -- much of which was gained in several billion dollar plus acquisitions over the past few years --are used to train the technology in specific domains.

Currently, hundreds of millions of people are interacting with Watson in some way, with that number expected to reach 1 billion by the end of next year, Rometty said. That includes 200 million consumers who come across the technology deployed by IBM’s clients in a number of areas, such as shopping, travel planning, buying insurance and accessing banking and government services. Watson currently has been trained in 20 industries.

“This is the moment -- it’s clear to me and to the world that Watson is the AI platform of business because we understand all these dimensions,” Rometty said.

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