Calling IBM Watson the first system in a new era of computing, IBM CEO Ginni Rometty announced Thursday morning a $1 billion-plus, multi-year investment in Watson, the first cognitive computing technology. The infusion includes the formation of a new Watson Group with 2,000 employees and a new headquarters for the group in the East Village of New York City. The move is a strategic shift by IBM to accelerate the entry of a new class of cognitive software, services and applications into the market, delivered primarily through the cloud.Gartner Inc. says smart machines will be the most disruptive change agents ever brought about by IT and can make people more effective, empowering them to do “the impossible.”

“We don’t create new units very often, but when we do it’s when we see something that we believe is a major shift in the industry,”Rometty said. “This is an important moment in our company’s history and in the history of technology,” the start of the third era of computing: the cognitive era. The first era, she said was tabulating and was characterized by punch cards and financial control, going back to the 19th Century. The second era was the programmable era, inaugurated by the introduction of the IBM 360 mainframes in April 1964. In that era humans had to tell computers what to do by writing programs. In this new era, cognitive computers like Watson will learn by absorbing and understanding large amounts of information the way humans do but at a very fast rate. Instead of being a tool, Watson will be a colleague, working with humans, reachable through the cloud, able to fully understand and answer them intelligently, initially through typed media but eventually voice and video as well, without requiring them to use programming languages.

The new Watson group will be headed by IBM SVP  Michael Rhodin, who last served as SVP of the IBM Software Solutions Group. It will focus on R&D and bringing cloud-delivered cognitive applications and services to market. IBM’s investment includes $100 million available for venture investments to support the company’s recently launched ecosystem of start-ups and businesses, building a new class of cognitive applications in multiple areas in the IBM Watson Developers Cloud.

The IBM Watson Group will have a new headquarters at 51 Astor Place in New York City’s “Silicon Alley.” In addition to the 2,000 professionals making up this group focused on the practical applications of Watson, IBM has dedicated a full third of its 3,000-member corporate R&D division to developing Watson 3.0. The new group will tap subject matter experts from IBM Research, Services, Software and Systems divisions as well as industry experts who can identify applications where cognitive computing can disrupt and evolve. Initial focus areas include healthcare, financial services, retail, travel and telecommunications.

Catalyst for Market Transformation

Terry Jones, founder of Travelocity and Kayak.com, and one of the industry experts speaking at the announcement that was streamed live over the Internet, explained the difference between programmed and cognitive computing in terms of travel questions. Today if a person planning a trip typed “I need to be in Fargo tomorrow morning at 8 a.m.” into Kayak the system would not understand how to respond. But Watson would understand this question, its various elements, and background from the individual’s records that might include special needs and dietary restrictions. Instead of responding with a list of flights to Fargo it would make one or more specific recommendations. If the customer added more information on his needs, it would adapt its recommendations to met them. Instead of just providing data services, he said, Watson would act as an expert travel agent, finding the best answer to the individual’s need.

In addition, IBM announced three new services based on Watson:

The IBM Watson Discovery Advisor is designed to revolutionize how industries such as pharmaceutical and publishing conduct research. Today’s research tools churn out thousands of search results that their users must wade through. The Watson Discovery Advisor will wade through the often massive amounts of data and uncover connections that will speed and strengthen their work based on its understanding of their needs. And the researchers do not need to use programming languages — Watson works completely in human language.

IBM Watson Analytics creates visual representations of big data insights for researchers without the need for advanced analytics training. It removes common impediments in the data discovery process, enabling business users to quickly and independently uncover new insights in their data. Watson Analytics automatically prepares the data, identifies the most important relationships, and presents the results in an easy-to-interpret interactive visual format.

IBM Watson Explorer is designed to help users across the enterprise uncover and share data-driven insights more easily and help organizations start big data initiatives more quickly. It provides a unified view of all their data-driven information as well as a framework for developing information-rich applications that deliver a comprehensive, contextually-relevant view of any topic for business users, data scientists and a variety of targeted business functions.

Photos and videos courtesy IBM