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.

International Business Machines Watson Reports About Thanksgiving Sales

IBM talks about the changes observed in Thanksgiving sales pattern.

The holiday season is that time of the years that succeeds in drawing a lot of attention due to the steep discounts and lucrative deals that the retailers come up with particularly on Black Friday and Thanksgiving. According to International Business Machine Corp.’s data analytics platform Watson, it has been deduced that the online sales this annum have gone up by 26% during the Thanksgiving period in comparison to the same time the previous year. Almost 60% of the online shopping done this year is observed through online shopping via smartphones which itself is a significant change.

It has been deduced by the company that on an average consumers spent around $123.45 for each order. This clearly indicates that the online sales governed during Black Friday will surge by 14.5% on a year over year (YOY) basis. According to Watson, it was deduced that there were certain products that were actually consumer favorites. This encompasses the televisions by LG, Surface Pro 4 by Microsoft Corp., and Apple Watches by Apple Inc.

Considering the skyrocketing thanksgiving sales, it will not be wrong to assume that the Black Fridays were a bigger success this year. Mr. Erinn Murphy, the analyst at piper Jaffray was shedding lights on the preliminary data that was observed regarding the Thanksgiving sales. Consumer items and electronics were said to be the best sellers this season since the demand for these products was extremely high. It was also deduced by ChannelAdvisor that the shopping done on Thanksgiving was extremely aggressive this annum.

IBM Watson also came up with the list of the top retailers during the Thanksgiving sales and the company that observed an increase in sales by 31.2% in comparison to the previous years was Amazon.com Inc. as reported by ChannelAdvisor.

During this point of time it can be easily said that the trend of shopping online due to the convenience and efficiency these platforms offer have increased significantly. People prefer to sit back at home and shop rather than paving their way to a brick and mortar store to shop conventionally. This has ignited a lot of concerns since the population at stores is going down significantly. Many retailers that just have brick and mortar stores are extremely concerned about their business where most consumers are trying their best to pave their way online some way or the other. IBM is playing a significant role in acknowledging analysts, investors and consumers regarding the changing market trends.