Offered as a cloud service it will give organizations the ability to leverage cognitive computing

For several years IBM Corp. has been touting its Watson supercomputer, a powerful number cruncher which it has been using in a number of test projects stretching the limits of analytics.

Today it said it will create the IBM Watson Group to commercializing the technology of cloud-delivered cognitive innovation.

“The move signifies a strategic shift by IBM to accelerate into the marketplace a new class of software, services and apps that think, improve by learning, and discover answers and insights to complex questions from massive amounts of big data,” the company said in a news release.

It’s spending more than US$1 billion on the Watson Group, which will have a staff of 2,000 focusing on development and research and bringing cloud-delivered cognitive applications and services to market. This will include US$100 million available for venture investments to support IBM’s recently launched ecosystem of start-ups and businesses that are building a new class of cognitive apps in the Watson Developers Cloud.

Watson uses its power to learn from each interaction, IBM says, working with users who make natural language queries. “Watson is the ultimate advisor,” IBM says.

Forrester Research lead cognitive computing analyst Michele Goetze said the company is placing a big bet.  If it succeeds, people’s interaction with IT will be truly personal by using natural language queries, she said. “There are still hurdles such as expense, complexity, information access, coping with ambiguity and context, the supervision of learning,and the implications of suggestions that are  unrecognized today. To work, the ecosystem has to be open and communal. Investment is needed beyond the platform for applications and devices to deliver on Watson value. IBM’s commitment and leadership are in place. The question is if IBM and its partners can scale Watson to be something more than a complex custom solution to become a truly transformative approach to businesses and our way of life.”

The Watson Group will be headquartered in New York City, where application developers will identify markets that cognitive computing can use, such as healthcare, financial services, retail and telecommunications.

“IBM has transformed Watson from a quiz-show winner, into a commercial cognitive computing breakthrough that is helping businesses engage customers, healthcare organizations personalize patient care, and entrepreneurs build businesses,” Michael Rhodin, senior vice president of the new Watson Group. “Watson is one of the most significant innovations in IBM’s 100 year history, and one that we want to share with the world.  With these investments we strive to make new markets, reach new buyers and transform industries and professions.”

Three years ago Watson made headlines when it became a winning contestant on the TV show Jeopardy. The current version is 24 times faster and 90 percent smaller – IBM [NYSE: IBM] says it has shrunk the system “from the size of a master bedroom to three stacked pizza boxes.”

Initial services announced today are the Watson Discovery Advisor, aimed at reducing the time researchers in industries like pharmaceuticals need by analyzing research articles and studies; Watson Analytics, which will go through customer data and presents results of queries in easy to interpret visual formats; and Watson Explorer, which will present a unified view of customer data.

Until now IBM has used Watson with a number of U.S. healthcare institutions to help advise doctors. Last year IBM announced the Watson Engagement Advisor for businesses, which is being tested by a bank and a public opinion firm.

Last November it created the Watson developers platform. Three partners plan release Watson-based apps this year: Fluid, a consumers shopping advisor; MD Buyline, which will help hospitals procure devices; and Welltok, for health plans.

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