Watson Health, which generates nearly $1bn in annual revenue, has not been profitable for the US tech major


IBM is mulling sale of Watson Health, as per some media reports. (Credit: Treesmittenex/Wikipedia.org)

IBM is reportedly mulling to divest its Watson Health business in a move to streamline the company and focus on cloud computing operations.

The US technology major is assessing alternatives for the healthcare technology business, reported The Wall Street Journal, citing people having knowledge about the matter.

The company could contemplate a sale to a private-equity company or industry player, or a merger with a special purpose acquisition company, as per the publication.

Watson Health, which makes around $1bn in annual revenue, is currently not profitable, said the sources.

The business is a data, analytics, and technology partner for the health industry.

It leverages artificial intelligence (AI) for helping hospitals, insurance companies, and pharma companies to manage their data.

Earlier this month, Watson Health entered into a partnership with health insurance company Humana to use the AI-powered IBM Watson Assistant for Health Benefits to simplify and improve the member experience for the latter.

Some of the other brands of Watson Health are Merge Healthcare, which analyses magnetic resonance imaging (MRIs) and mammograms, and Phytel, which helps in patient communications.

Another brand of the IBM unit is Truven Health Analytics, which is engaged in analysing complex healthcare data. Truven Health Analytics was acquired by IBM in 2016 for $2.6bn.

Last month, IBM reported a net income of $1.35bn for the fourth quarter of 2020 compared to $3.67bn made in the same quarter of 2019. The company’s Q4 2020 revenue was $20.36bn compared to $21.77bn reported in Q4 2019.

For the full year 2020, the revenue was $73.62bn compared to $77.14bn in the full year 2019.