Watson Need Not Be Blamed For IBM's Downfall

Watson is not the dominant force contributing to IBM's downfall

If you have seen the advertisements of the International Business Machines Corp. or if you’ve read the declarations made by the company then you might agree that they are making a huge bet with Watson. Its popular “cognitive computing” engine might make many believe that the project is not doing quite well.

The company informed the investors recently, irrespective that the company has tried to make all sort of services available with Watson insight, the net income of the company dropped down by 19% during the last trimester of FY15 and will drop down further this annum. However, the issue is not that Watson has failed as a technology. The challenge by the business segment of IBM is so extravagant that it makes it difficult to believe that any other smart business service could actually solve it.

To be particular, masses have the right to ask how valuable Watson actually is. Two years back, it was made obvious that the processing of natural language, geniuses designing the data scanning program paved its way to a show Jeopardy! Was not actually conveying and attracting businesses in the right manner which other businesses could use. The Financial Times recently observed two weeks back, that IBM has brought so many cloud computing technologies under the Watson label making it very difficult to deduce what the service primarily is. This however aroused several questions regarding the brand is now making use of a halo effect for several technology that are not as evolutionary as perceived.

Even if the company would have transformed Watson into a business, still IBM would be in hot waters due to the present market trends that have strengthened over a relatively long span of time. The increase in popularity of the cloud computing services has minimized the need for big organizations to buy mainframes and IBM servers. This was happening before the time Ms. Ginni Rometty became the CEO of the company in FY11.

However, the predecessor of Rometty, Mr. Palmisano was great enough to camouflage the shortcoming and still make Wall Street happy by selling out all those unprofitable business segments. The strategy deployed was simple, the company was buying high end software firms and then paid investors back in the via share buyback plans and dividents. However, there are a few financial cards that the company needs to pull out. It has been 15 consecutive quarters where revenues have ripped apart. It needs to change now before it’s too late.

IBM's Latest 70-nanometer chip To Be Launched Soon

IBM to come up with a 7-nanometer chip soon powering cloud computing and smartphones.

International Business Machines Corporation is a renowned name in the world of computers where they are known for marketing and manufacturing computer related software and hardware. The company has now made another major announcement which many analysts consider it to be a massive breakthrough in terms of computer chips.

A growth has been seen in the way IBM used to function. Earlier, the company only used to manufacture personal computers along with hard drives to individual customers. However, now their business has evolved to a great extent where they have now started to focus on bigger games like cloud computing, business intelligence, data analytics along with other businesses that is churning profits. The company now knows what it needs to do in order to establish its roots further in the industry.

As reported, the tech behemoth has now revealed the first 7-nanometer chip which is one of a kind across the globe. This chip is miraculous since it will have the ability to boost the computing power of devices as minute as smartphones to spacecraft. The chip has the potential to accommodate more than 20 billion tiny transistors and switches that has resulted in a surge in terms of the computing ability.

International Business Machines Corp is extremely optimistic about this venture where it believes that the future of the mobile industry and cloud computing is reliant on this chip with other technologies. The company was successful in making this chip once they invested almost $3 billion parallel to Samsung Electronics Co Ltd and Global Foundries situated at the State University of New York.

The tech behemoth believes that this is actually a breakthrough in the world of computer chips where these new chips denote a 50% increase in terms of performance and power when compared to the regularly used 14 and 22-nanometer chips.

Mr. Michael Liehr, VP of Research and Innovation at the University of New York stated, “Enabling the first 7nm node transistors is a significant milestone for the entire semiconductor industry as we continue to push beyond the limitations of our current capabilities.”

IBM is still working on this chip and soon will be able to launch it for the masses. This has become a source of anticipation where many analyst and tech affiliates are keeping an eye on the company so that they can study the course of IBM once it launches the chip.

Cloud Computing To Bolster Revenues For Microsoft Reports Bernstein

Bernstein is optimistic about Microsoft's ongoing Office transition.

The Build Conference held this year was a platform for Microsoft Corporation to lay out the expectations for is Office platform. Bernstein, the popular equity research organization mentioned in a recent note to investors and customers talked about the impacts of Microsoft’s predictions on their earnings report.

In the Build Developers Conference, the company talked about three core aspects that talk about the growth of its Office platform. According to BidnessEtc, “Commercial Office installed base growth, timing of mix shift to Office 365, and increase in customer value as customers shift to Office 365. Bernstein noted that it is highly crucial to gain an insight into how the transition of customers to Office 365 affects Office gross profit since Office is Microsoft's largest business line.” This is said to be the biggest transition to cloud computing that is happening currently.

Bernstein believes that the gross profit of Microsoft’s Commercial Office is likely to experience a 6 percent increase in CAGR in the coming three years due to three reasons. Firstly, the company has decided to couple several products that were initially sold on their own. Currently, we have two bundles that come complimentary with Microsoft Office Commercial offerings namely, Data Centre apps and Office Desktop apps. PowerPoint, MS Word and Excel are a part of the Office Desktop Centre applications. Through Office 365, the Desktop applications are allowed to move from licensed to subscription based software with a relatively minimal amount of cloud services.

Apart from this, the Data Center packages comprise of apps like Skype for Business, Exchange and SharePoint. These were only retailed to enterprise based clients and are now being moved to cloud gradually. According to Bernstein, this will result in a rise irrespective of which platform it is offered that is license sale or Office 365.

Bernstein has also weighed on MicrosoftCorporation, where the company is embracing an ongoing transformation in terms of gross margin profit. The firm has made a forecast where the coming three years can bring a 50 percent of the Office Desktop app and almost two third of these Data Center apps can be made available via Microsoft Office 365. This will help them make a significant rise in terms of its Office Suite performance.

Hence, Microsoft has a stable future in the times to come provided it gives due attention to its cloud computing business which has immense potential to grow. This will not only provide the company stability but will also stabilize them in the long run.