“The Watson Health sale has been anticipated for quite some time,” Paddy Padmanabhan, CEO of healthcare and tech advisory firm Damo Consulting, said in an email. “IBM was clearly not gaining much traction in the healthcare market while others such as Google and Microsoft have pulled ahead.”
Watson Health was borne out of IBM’s larger Watson
effort, which aims to use artificial intelligence to solve a range of problems for businesses and consumers — from creating a computer that can debate humans
to getting sports fans engaged in big events
. IBM remains committed to its other Watson projects, Tom Rosamilia, senior vice president of IBM Software, said in a statement.
Under Krishna, IBM has been working to transform itself from a legacy IT services provider to a modern cloud business, a strategy boosted by its 2018 acquisition of open source software provider Red Hat, which Krishna helped broker. The company is making a big play in “hybrid cloud” — a setup wherein companies may use multiple clouds in addition to on-premises servers. In late 2020, IBM announced it had set aside $1 billion
to invest in getting other companies onto its hybrid cloud platform. A month later, IBM announced the spin-off
of a quarter of the company to focus on the cloud.
The terms of IBM’s agreement with Francisco Partners were not disclosed. Watson Health’s current management team is expected to remain in place at the new entity, according to the two companies.