Kagan: IBM Watson Health Fails, Becomes Merative After Acquisition

Jeff Kagan  |

Image source: Merative

IBM Watson is a brilliant idea in the AI space but has found that success is tougher to achieve than previously thought. Apparently, technical jargon does not always translate easily to ordinary English where everyone can understand. Many companies are highly technical, and not all of them do a good job talking to the public and the marketplace meaning analysts, investors, media, customers, regulators and more.

That’s one reason Watson Health failed under IBM. Brilliant idea. Hard to understand. Now, it’s new owner wants to give it another try. Will it be more successful?

Let me start by saying that IBM Watson is simply amazing. The problem is that it could not communicate its potential to the general marketplace well.

I have seen Watson up close and personal. IBM held a World of Watson event in Las Vegas several years ago. This was a massive show with countless high-profile industry and government leaders and companies. The presentations from all of them were exciting. As a matter of fact, they were earth shaking.

If that’s all it took, Watson should have been a big hit. So, where did it go wrong?

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IBM Watson Health AI is impressive, but never marketed well

IBM Watson Health played an important role as a leading segment in its World of Watson event. High level presenters from the United States, as well as other nations globally, did a great job of creating excitement.

It seemed it couldn’t fail. Yet it did.

This should have been the starting point catapulting Watson to the stars. While that show was a big hit, however, the problem was before and after.

You see, IBM is a technical company. It is full of brilliant technical people and minds. The problem is that simply does not translate well to the general public and marketplace's understanding.  

IBM simply did not appreciate this.

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IBM Watson was the AI introduction to general marketplace

Watson was an idea in AI or Artificial Intelligence before that term caught on. IBM had been working on and developing this new technology for many years before it launched as a player in the Jeopardy TV game show back in 2011. That’s more than a decade ago.

The idea was earthshaking. IBM could have owned the AI space going forward if they thought like marketers, advertisers and public relations geniuses.

It could have, but it never did. IBM tried. Going on Jeopardy with Watson was one brilliant idea. Afterwards, however, the company didn't follow through, and the term IBM Watson was seldom heard again.

IBM World of Watson in Las Vegas shook the AI world once again

The World of Watson years later in Las Vegas was another big deal, but once again IBM went quiet afterward.

Marketing is a monster that must continually be fed, or it falls asleep.

IBM does not think like marketers, so even though the company is replete with geniuses, it failed.

The problem was, marketing was not a core expertise, and because of that, the company could never make Watson an important term or technology to the real world.

I am not sure what the future of Watson has in store. That’s been the problem the entire time. No vision. No clarity. Not that it continually shared with the marketplace anyway.

This sort of reminds me of the time the company rode the ThinkPad computer to new highs, but then lost its marketing way, selling the unit to Lenovo and exiting the space.

Francisco Partners acquired Watson Health, changing name to Merative

Now, Watson Health has just been sold to private equity firm Francisco Partners, and the company will be called Merative going forward.

Merative is another one of those words like metaverse which means very little to the marketplace at this early stage. There is no brand value yet. No recognition of the name yet.

So, Merative will have to work to create its own brand meaning and awareness. There are challenges no matter the path it takes.

On one hand, Watson was not a success. So, Merative will blaze its own new trail going forward. If successful, this will still take a while and be very costly.

On the other hand, Watson was one of the leaders in creating early awareness to the new world of AI. It would have to be reinvigorated, but it has tons of value.

Just as Lenovo kept the ThinkPad brand and built upon it, I would have thought that Francisco Partners could have done the same with the Watson name.

With the name change, however, the private equity firm will be forced to create a new identity in a crowded and noisy industry.

This means that the company will have to spend a fortune over many years creating its own new identity in the AI marketplace.

This is a mistake from where I sit, but I hope it is successful.

Merative is an AI data analytics company without Watson brand identity

Going forward, who is Merative? It is a data analytics company. While this makes sense to the people who now own it, it still does not translate well into general English.

That means the challenge to make the general public understand will be an albatross around the company's neck. This is the same problem Watson faced all along.

So, can Merative be successful at building a strong and vibrant brand in this space?

I hope so, but we will just have to wait and see.

The good news is the marketplace continues to grow and change. Today, there are many new technologies like AI, IoT, cloud, AR, VR, metaverse and more. Together and separately, they will transform our world.

This is where Watson would have played well and led. Merative will just be one of the countless names in a very noisy industry.

We are still in the very early stages of the next generation of products and services.

That means the future is brighter than ever… if Merative understand the challenges they face and the best solutions to them.

Marketing will be key to Merative's success and growth

It all depends on who is running the marketing department at Merative, which includes advertising, public relations, corporate communications, analyst relations, investor relations and more.

Going forward, Merative could indeed hit the big time. This is something I hope it does.

IBM tried and failed, however, and that company had the size, scope and clout to make it happen. It has a strong brand with a long life.

We don’t yet know the marketing capabilities of the Francisco Partners and others that are working on Merative.

Does Merative have what it takes to succeed in Artificial Intelligence?

This new company plans to offer health and medical data services to client companies. These are employers, health plan providers, life sciences and so many others.

So, the future for Merative is potentially bright if it can make the magic a reality. This is the challenge of every company, large and small, new and old.

Every company must have a real steak, but it must also be able to sell the sizzle. That’s where IBM failed with Watson Health.

Merative has the Watson steak. Now the question is, can it sell the sizzle?

That’s a question that Merative will have to answer going forward. I hope it can. Watson Health or Merative is too potentially important to let languish.

 

Jeff Kagan is an Equities News columnist, wireless analyst, consultant, speaker and author. Areas of interest include wireless, 5G, telecom, Internet, AI, IoT, pay TV, autonomous driving, healthcare, telehealth, Metaverse, mobile pay, new technology, drones, regulation, M&A, changing political environment and more. He has a strong following on Twitter and LinkedIn. Kagan has been an influential independent industry analyst and columnist for more than 30 years. His web site is www.jeffKAGAN.com, and you can follow him on Twitter @jeffkagan and on LinkedIn at www.linkedin.com/in/jeff-kagan/.

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Equities News Columnist: Jeff Kagan

Source: Equities News

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