 Hi, this is Stu Miniman here with Jeff Kelly and Wikibon's corporate headquarters in Marlboro, Massachusetts. And thank you for joining us for Cube Conversations. Cube Conversations is where either the Wikibon participants themselves or some of the thought leaders and others in the community talk about some of the questions we're getting in the community, some of the hot topics going on. And what we're here to talk about is how some of the legacy companies, some of the big enterprise IT companies are looking to take advantage of some of the big trends that are going on. Of course at Wikibon, we've been talking about cloud and big data for many years now. So Jeff, IBM made a big announcement today that fits into the space along with their Watson portfolio. Can you tell us what did IBM announce today? Sure. So IBM had a big press conference today to announce some news around Watson. Namely, they've established a new standalone business unit called the Watson Group, which is going to focus exclusively on Watson. They've announced that they're going to invest a billion dollars plus into that business unit over the next two years or so. Among other things, they've also announced essentially a startup fund of a hundred million dollars. Essentially, they're trying to attract startups to build applications on top of Watson, cognitive applications to build applications that can span any kind of retail healthcare, you name it. Some other news, this business unit will be based in New York City, which IBM made a kind of a big deal about. They want to really kind of focus on the developer of kind of being hip and cool. I mean, they basically said that straight up in the announcement. So I don't know how cool it is when you actually have to state it, but nevertheless, this business unit will be based in New York City. So they've also announced a few different products. So a lot happening today with Watson. So Jeff, I want to poke at those two things, a couple of things you mentioned. First of all, a billion dollars, it sounds like a big number, but when I watch IBM, they put out a billion dollars a lot. There was a billion dollars towards Linux. There's a billion dollars towards big data. Is a billion dollars a lot for this technology? Well, I mean, it's all relative. When you talk about IBM, which does significant revenue every year where maybe a billion dollars is not quite a huge number when you're looking at it in that context. But I still think it's significant. And clearly, IBM understands that Watson is an important part of their future success. So they're starting to invest in it now. I would imagine that that number will increase. I mean, the billion dollars is over the next couple of years, over the next 10 years, which really, this is a 10-year play. This is very early days for Watson and the whole cognitive computing space as they're calling it. So I suspect that number will increase significantly. But I think it is important for IBM to get out in front of this and actually really start transitioning Watson from that kind of cool application that beat Ken Jennings and the other fellow who I forget his name, the other big winner on Jeopardy. And actually making Watson into a viable product where it's gonna actually bring in some significant revenue and be a cornerstone of IBM in the future. Yeah, and I guess, if we talk about New York City, obviously Silicon Alley is not exactly Silicon Valley, but it's a big tech hub. Of course, here in the Boston area, we have a lot of tech startups also. Does it matter as much where they are located? Because if we look at, my understanding, some of these services are really cloud-based and developers are all over the world. How much does it matter where they are? Well, you're right. You don't necessarily have to be physically located in New York City to take advantage. Some of the opportunities IBM is making available to developers now. But that said, the new headquarters is gonna include some incubator space, some actual hardware assets that developers can use if they're based in New York City area. And of course, a lot of the more commercial-type applications that we're seeing hit, mobile-type applications that we're seeing hit the scene. A lot of those folks are based in the New York City area. So I think it makes sense that they would headquarter this new business unit there. But to your point, for more traditional enterprise customers who are looking to deploy some of these new applications that IBM announced today among those applications around visual discovery, analytics, what they're calling Watson Explorer, these are available essentially from the cloud. So for the more enterprise-type customers, rather than the startup developers, location doesn't quite matter as much. So Jeff, we've been tracking Watson since it was kind of that cool thing you mentioned on Jeopardy. There's been some interesting little ideas that IBM's had with it and some niche environment. So what do you think IBM really needs to do to take this to a much more broader commercial adoption? Well, I think a few things. One, which is in line with what they announced today, is they need to engage the developer. They need to win developer mind share. IBM alone, as many smart people as they have working there, are not going to come up with all the best ideas for the applications they're gonna build on top of Watson. So engaging the community, great idea, and they need to continue doing that. And $100 million fund essentially to fund some of these startups who are doing this work. I think is a great start to that. The other thing they need to do is understand, or I shouldn't say understand, I should say prove that they can make this into a viable, repeatable business. So at the press conference today, we saw a number of early, I guess you could call them partners who helped develop some of the applications on top of Watson, the early applications we're seeing now. Obviously, these are major engagements where IBM is investing people, resources, working very closely with these partners. You can't do that over the long term if you wanna make this a large business with a large customer base. You can't go to every single customer and put that many resources into it. So the challenge, of course, is for IBM to prove that they can make this a viable, repeatable business where they've built applications that customers can just access with relatively small services part of the engagement. The other thing is, from a technology perspective, Watson really is focused around structured data. So there's still a lot of underlying work that has to happen before you can engage with Watson. They're calling this the Watson Foundation. Essentially, it's just another way of saying all the other big data assets that IBM has under the covers around Hadoop being one, but also their data warehousing and other data management technologies. So it remains to be seen how much work has to go into each deployment there. But it doesn't seem to me at this point that Watson is just a point and click application. There's a lot of work that has to go into kind of making the most out of Watson. So the other challenge there, of course, is to simplify that process, speed it up, and make it as easy as possible for customers to adopt these applications. Okay, great. So Jeff, any final closing notes that you wanna give us on where IBM needs to be going in the future on this? Criticism, do you already hearing from the community or where's the wrap on this? Well, I think it's an overall really exciting day for IBM Watson. I think we as a community have been waiting for them to take these steps. It's kind of been a long slog. I mean, the Jeopardy game was back in what, 2011, I think. So we're talking three plus years to get to this point. But then again, this is a pretty complex type of computing and it takes time. But the other things, as I mentioned just a moment ago, they've got to prove they can make this repeatable business. And then, of course, there's questions around how we're gonna leave some of the other products in their portfolio. I was thinking, as I was listening to all of this today, one of the new applications is essentially a Watson analytics, essentially an application where you can ask questions in natural language and get visualizations and dashboards and things back. So I'm wondering where does this leave their business intelligence application portfolio, somebody with something like Cognos. So that remains to be seen how that's gonna work out. But this is clearly a long-term play, a big part of what IBM is betting on for the future. Future growth, they've had, I think, six consecutive disappointing quarters IBM has. So clearly, the street is looking for them to show some leadership and show some new innovation. And I think this is where IBM's hanging their hat. Okay, so yeah, a billion-dollar investment, over 2,000 people working on it, obviously, an area that IBM's putting a lot of kind of wood behind the arrow. So potential for a big growth opportunity, area that, you know, Jeff, I'm sure you'll be watching. Look forward to seeing your writing and additional conversations with you on it. So thank you everybody for joining CUBE Conversations. We will see you next time.