IBM’s AI computer “Watson” has a dominant presence in the early AI market, establishing its leadership position. Watson has emerged as a critical business that will influence IBM’s future.
Japan’s Nihon Keizai Shinbun reported that the annual sales of Watson set a milestone in the yen-equivalent exchange rate of 1 trillion yen (about 10.1 trillion won). IBM does not announce Watson’s business revenues separately, but the newspaper estimates that last year its revenues exceeded 1 trillion yen, accounting for about 10 percent of the company’s total revenues.
Watson has been used in various ways to improve the business of companies from tax consultation to medical diagnosis including cancer diagnosis. H & R Block, the largest US tax service provider, has introduced Watson this year to advise tax returns. When a tax consultant interviews a customer when writing a refund report, Watson finds a target for a refund. H & R’s CEO, Bill Cobb, said, “Customer satisfaction grew by 2 percentage points in the first four weeks of adoption,” and added, “Currently, sales of about $ 3 billion increase by 2 percent.”
General Motors uses Watson to provide information services that take into account driver habits and tastes. Japanese distributor AEON wants to deal with Watson’s in-house call center. The world’s 35 medical institutions have adopted Watson for cancer diagnosis. “The number of patients diagnosed by Watson at the beginning of last year was 10, but by the end of the year there were about 10,000,” said John Kelly, senior vice president of IBM.
Microsoft and Google are all starting to leverage AI, and IBM is taking advantage of it. Watson has defeated the World Chess Champion in 1997 and has won a lot of recognition in the field of AI, winning two human winners in the US famous quiz show “Zephyr” in 2011.
In 2014, IBM entered a new business around Watson. “IBM has been a pioneer in AI proliferation at the business scene,” research firm IDC said.
IBM’s booming mainframe business is losing ground because of the spread of the cloud, which allows IT services to be used inexpensively without the need for hardware and software. IBM CEO Lombardi said, “Watson is a technology that can be used right now, not the future.”
Watson is currently a leading position in the AI business, but there is no assurance that his position will be guaranteed. “I think Watson is the smartest, but it’s hard to teach,” said Satoshi Murayama, managing director of UFJ Bank, Mitsubishi Tokyo, who uses Watson for customer support. “I am using different AI depending on the usage such as employing other venture company technology for simple report writing.”
IBM is also working to improve the performance of Watson in pursuit of its competitors. In 2015, IBM acquired the U.S. start-up Akamai API, which has strengths in “deep-running” to find its own complex features in large amounts of data.