Bob Dylan may not be impressed with the songwriting abilities of Watson in the advertising campaign IBM is running for its supercomputer that is supposed to understand language and mimic the inductive reasoning of a human brain. But the company is counting on Watson's creativity, paired with a major push into the Internet of Things, to spark sales in its data-analytics and cloud-computing business.
The Internet of Things division will play a key role in driving revenue and profit within five years, Harriet Green, IBM's vice president and general manager for Internet of Things and Education, told Bloomberg Television. The company on Tuesday announced the opening of a new global headquarters and research lab in Munich, Germany, for a division that will build Watson-based applications for Web-connected devices.
The facility and eight other global centers are part of a $3 billion investment in the unit set out in March by Armonk, New York-based IBM Corp.
"How this fits into the future of IBM is around profitable growth," Green said. "We think it has real high growth, profitable growth potential."
After 14 straight quarters of declining revenue, IBM has been looking for ways to grow as sales of its traditional IT services and software slump. The Internet of Things division, which is less than a year old, currently contributes less than 1 percent of the company's $93 billion in annual revenue, Green said.
The new global headquarters in Munich is Big Blue's largest investment in Europe in more than two decades and will eventually house 1,000 data scientists and consultants, half of the total the company has committed to the Internet of Things group, IBM said in a statement.
The Internet of Things refers to the idea of using the Web to gather data from and, in some cases, remotely control devices from home appliances to traffic lights to toothbrushes.
Green, who described it as "a movement not a business," said hundreds of IBM clients are already using Watson's Web-connection services. The company has partnered with the Chinese government to find ways to reduce pollution levels in Beijing and with the government in Andalusia, Spain, to improve its ambulance services, she said. At its campuslike headquarters in Munich, IBM will be working with Allianz SE to find ways to streamline insurance underwriting and claims processing, she said.
