What’s poppin’ — IBM finally managed to find a buyer for its ailing healthcare business Watson Health — with PE firm Francisco Partners willing to pay $1 billion for it.
Watson, launched to much fanfare as the NEXT BIG THING in AI, turned out to be mostly hot air and marketing, struggling to sell a dime worth of software, while losses stood in billions.
Meanwhile IBM missed the big revolution of cloud-computing, and its stock has been dead money for over 7 years now. Even the most patient investors were getting super angsty.
Anyway, so IBM fired its CEO recently and brought Arvind Krishna to do a clean up job. Amongst many major moves, Krishna spun out IBM’s low-margin services business, and now has managed to sell off Watson Health for a decent sum.
Big picture — its a survival battle for the company. If the business doesn’t return to growth, a General Electric like split-up or sale may be imminent.