IBM is looking to sell its IBM Watson Health business, which generates around $1B annual revenue. The business's brands include Merge Healthcare, Truven Health Analytics, and Phytel, which it acquired for an overall cost of $3.8B.
- The company is considering options, including a SPAC merger and selling the unit to a private equity firm.
- On Oct. 8, 2020, IBM announced that it would spin-off its managed infrastructures unit as a separate company to focus on its cloud platform led by Red Hat and growing markets like A.I. and hybrid clouds. Post-separation, more than half of IBM's revenue will come from subscriptions rather than services. IBM acquired Red Hat in 2019 for $34B.
- Watson Health was expected to be one of the company's major moves into A.I. and healthcare. However, physicians' reluctance to adopt the technology and problems in collecting and analyzing data under medical privacy laws are some of the factors that could have led to the division's lack of growth. Similarly, Google's healthcare division DeepMind is also yet to turn a profit.