ibmwatsonevent3IBM is getting down to business with Watson. Today it officially launched its NYC-based IBM Watson Group at an event in downtown Manhattan. The new business unit – a $1 billion investment for Big Blue – will be headed up by Mike Rhodin, senior VP for Watson and formerly its Software Solutions Group lead,

“We don’t form a business unit very often. When we do it’s to make our company, our clients, our partners accelerate progress. It’s not just about business—it’s about advances that make a big difference to all of society, said IBM CEO Ginni Rometty at the event, which took place at 4 World Trade Center and also was streamed live online. Declaring us to be in the “cognitive” era of computing, in which computers will learn, get smarter over time and unleash insights from Big Data, to help us make better judgments, Rometty discussed IBM’s plan of having entrepreneurs and developers leverage its Watson Developer Cloud to create their own solutions, and the interest by some 750 companies in working with them towards those ends.

Some 2000 people will be part of the new IBM group, which will be situated in the East Village’s Silicon Alley. To drive the ecosystem it wants to see around Watson Cloud-delivered cognitive apps and services, it’s making $100 million of that billion dollars available for venture investments in startups and businesses. The fundamental idea, Rhodin noted, is pulling together the cloud, content, and investment to get things up and running. “The first thing you need in an ecosystem is the developer cloud, the second thing is…content, the fuel of a cognitive system,” he said, and you need to “make a pool of talent available to the ecosystem to accelerate its speed and build-out.”

The event featured executives from Memorial Sloan-Kettering and Cleveland Clinic, to discuss Watson’s progress so far in the healthcare sector to improve care for patients in the data-intensive realm. But healthcare was just the first vertical for Watson. Also coming to the stage was Travelocity founder and Kayak chairman of the board Terry Jones, who discussed how the travel is the biggest part of ecommerce, but that you still can’t get expert travel advice on the web. Turns out he uses travel agents himself to plan vacations with experiences like cooking with a one-star Michelin chef in France.

watsonevent2“With online everything has to fit in a box. Why can’t discovering my perfect trip be as easy as a conversation?” he asked. “I think it can.” With Watson, he demonstrated the possibilities: Its ability to understand a user’s wide-ranging query about a vacation suitable for spouse and kids, with a great spa and restaurant, water activities, and so on. “Before you could ask that question but you couldn’t get an answer,” he said. “With cognitive computing it can be done,” as Watson can understand the natural language question and analyze millions of reviews and blogs and come back with a 98% confidence rating that Bali is the spot for the user. And it can go back and provide a quick reconsideration of that answer when the user further clarifies that she doesn’t want to be limited to a beach vacation but also explore dry land opportunities.

“The problem is today that machines can understand what you are saying but don’t know what to do about it,” he said. “What if you said you have to be in Fargo tomorrow at 8 am? It would be a revolutionary change in customer service if the machine can understand that and know what to do with that. With Watson, it can. I think if we take cognitive computing and run it against the huge data problem we have in travel, we will turn data into advice and make travel advice as easy as the kinds of conversations we have today – and maybe we can revolutionize travel once again.”

Among the “entrepreneuers with bright ideas who can imagine the future that we can’t see,” as Rhodin described it, who came to the stage as partners in the burgeoning Watson ecosystem was Kent Deverell, CEO, Fluid Inc., which ihas developed a personal shopper for ecommerce that leverages Watson. Ecommerce has convenience and selection down, but what’s missing is delivering the great salesperson experience – aka real interaction and watson1 advice — that will raise the 2 percent conversion rates that most sites can claim.

“Sixty pecent of consumers abandon their purchase because they can’t get good information,” he said. “Making sense of things for consumers is the next big thing in digital retail.” Ecommerce, he said, is very data-driven, and while data is useful, that’s just one piece of the pie. The rest of it he sees in his company’s Expert Personal Shopper, which uses Watson to make a more human experience of the digital shopping process. Fluid teamed with NorthFace to create the Compass Gear Guide, “a natural, responsive and personal, intelligent, intuitive and limitless” system, and demonstrated its workings as a dialogue with the consumer to the audience.

Future Ahead

Rhodin discussed that IBM’s investment will also include 500 technical experts to help incubate new startups. Jeanne Sullivan, co-founder of VC firm Starvest Partners, joined him on stage to present her view that Watson can wake up many sectors that today are in “slumberland” for those entrepreneurs willing to take on the challenge. Among these, she said, is the world of human capital management – and Watson’s potential to even help solve joblessness by helping people better search for jobs. “So many people have no idea of the array of opportunities out there,” she said. Along with retail and healthcare use cases, she also said “there’s a huge amount of actionable trends that could be discovered from sifting through data in fintech.”

Three new Watson cloud services are being rolled out as part of the new IBM Watson Group, as well: Watson Discovery Advisor, to accelerate and strengthen research and development projects in industries such as pharmaceutical, publishing and biotechnology; Watson Analytics, to deliver visualized Big Data insights, based on questions posed in natural language by any business user; and IBM Watson Explorer, to help users across an enterprise uncover and share data-driven insights more easily, while empowering organizations to launch Big Data initiatives faster.

Rhodin said to expect down the road that Watson will learn to do more than read. “It needs to see – images and video. The analytics around those will feed Watson, to help us to understand information in a different way. We need to hear and we need to learn to listen. We all need to find a way to help the world experience cognitive technology in a new way,” he said.

Guru Banavar of IBM Research helped flesh that future out a bit more, adding that IBM also is improving Watson’s ability to conduct natural dialogues with people; to discover new knowledge to help in everything from drug development to materials engineering via “a brainstorming technique” to “come up with new combinations that might never have been considered before”; and that it’s opening the platform for the community at large to build new apps called cogs of all kinds.