IBM May Sell Watson Health Unit

IBM is considering selling its Watson Health business unit, according to several media outlets including The Wall Street Journal.

Reports indicate the tech giant is aiming to streamline IBM and become more competitive in cloud computing. The company is looking for alternatives for IBM Watson Health that may include a sale to a private-equity firm or industry player or a merger with a blank-check company, those familiar with the situation say.

IBM Watson Health currently employs artificial intelligence (AI) to help hospitals, insurers, and drug makers manage their data. The business unit was initially launched with the goal to expand into personalized medicine via DNA translation and the input of electronic health records. Watson Health, however, did not excel in the healthcare sector, partially due to physicians being hesitant to adopt AI technology, according to WSJ. The unit has roughly $1 billion in annual revenue though it is not currently profitable.

Watson Health’s brands include Merge Healthcare, which analyzes mammograms and MRIs, Phytel, which assists with patient communications, and Truven Health Analytics, which analyzes complex healthcare data.

IBM has been looking to boost its revenue share from hybrid-cloud software and services to let customers store data in private servers and on multiple public clouds. With its focus on cloud technology, new chief executive office Arvind Krishna said at the end of last year that he would spin off IBM’s managed infrastructure services unit into a separate publicly traded company. The unit is currently part of the Global Technology Services division and handles day-to-day infrastructure service operations such as managing client data centers and traditional information technology support for installing, repairing, and operating equipment.