IBM Aims to Enhance Watson Health with the Phytel Acquisition



IBM announced the Phytel and Explorys acquisitions

On May 4, 2015, IBM (IBM) announced the completion of the Phytel acquisition. The acquisition was announced in mid-April 2015. Phytel builds and develops cloud-based tools to augment care coordination and outcomes. Phytel’s software works in sync with healthcare providers’ technology to limit patient hospital readmissions, automate population health management, and enhance patient outreach and engagement.

KLAS is a research firm. In a report released in November, it placed Phytel as the leader in the population health services providers’ field.

Along with Phytel, IBM announced the acquisition of Explorys. Explorys is a spin-off from the Cleveland Clinic. It’s a cloud-based data analytics company. It uses cloud computing to identify patterns and trends in treatments and diseases.

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Acquisitions will strengthen Watson Health’s presence in healthcare space

The acquisitions mentioned above were announced in mid-April 2015. At the same time, IBM delved deeper into the analytics, cognitive computing, cloud, and healthcare space with the launch of Watson Health and the Watson Health Cloud. Watson Health is a business unit of IBM. It was built to enable the healthcare organizations involved in meaningful analytics to refine outcomes.

These acquisitions were strategically planned to strengthen and expand Watson Health’s presence in the healthcare space. The acquisitions mentioned above confirm the trend of M&A (mergers and acquisitions) heating up in the big data analytics space. Both of the companies—Phytel and Explorys—belong to this space.

To gain diversified exposure to IBM, you can invest in the Technology SPDR ETF (XLK). XLK invests 3.51% of its holdings in IBM.

IBM has the largest number of patents related to AI

As the above chart shows, among its technology peers, IBM is the leader with ~500 patents related to AI (artificial intelligence) in 2013. Microsoft (MSFT), Google (GOOG), and Oracle (ORCL) were among the top ten recipients of US patents in 2014.

IBM’s focus and position in AI were solidified by its supercomputer—Watson. It entered the healthcare sector in 2013. IBM claims that Watson helped lower physicians’ error rate in cancer diagnoses.

To learn more about IBM’s interest in AI, please read Why IBM Is Aggressively Pursuing Deep Learning and AI.


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