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IBM and Cleveland Clinic Team Up to Enhance Health Care
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International Business Machines Corporation (IBM - Free Report) and Cleveland Clinic recently inked a five-year agreement to enhance the health information technology capabilities of the latter. Cleveland Clinic will make use of IBM’s cloud platform, social, mobile and Watson cognitive computing technology. The objective of the agreement will be to establish a value-based health care system and to discover potential standards that could be adopted by health care providers across the nation.
The health care industry’s dependence on technology has increased significantly. The aim of the industry is to provide high-quality, more efficient and affordable health care through meaningful analysis of data that is readily available in the electronic health records (EHR) and administrative claims. This will not only enable a more personalized clinical care but will also help in population-focused management.
For example, with the help of technology, health care professionals will be better equipped to analyze which diabetes patients have become resistant to a certain type of treatment and change their course of treatment accordingly. Additionally, they will be able to ascertain, whether this particular trait is being exhibited by a certain section of the population so as to treat them in the best possible manner.
How IBM Fits into the Picture?
Per an IDC report, worldwide spending on cognitive systems and artificial intelligence is estimated to be over $47 billion by 2020 from nearly $8 billion in 2016 that represents a CAGR of 55.1%. Not surprisingly, there is stiff competition in the space, with the presence of some big players such as Alphabet (GOOGL - Free Report) owned Google’s DeepMind, Amazon’s (AMZN - Free Report) Amazon AI and Microsoft’s (MSFT - Free Report) Microsoft Artificial Intelligence and Research Group.
Recently, IBM announced that Unruly – a British ad tech company – will use Watson to build a new cognitive powered psychographic targeting tool to make digital video ads more audience targeted and thus more effective. (Read More: IBM Watson to Make Unruly's Digital Video Ads More Targeted).
In Oct 2016, IBM bought Promontory Financial Group – a Washington-based financial consulting firm – in a bid to broaden the reach of Watson into analysis of financial regulations and provide the most appropriate course of action to financial institutions. (Read More: IBM to Create Watson Financial Services with Promontory Buy).
During third-quarter 2016, IBM introduced Watson Conversation Service and Watson Virtual Agent for Customer Service. The service has already been selected by the likes of The Royal Bank of Scotland.
Given Watson’s popularity in the space, we anticipate more such adoptions in the future, which will definitely have a positive impact on the company’s bottom line.
Stock Performance Overview
Shares of IBM have underperformed the broader Zacks Computer Integrated Systems industry on a year-to-date basis. While the industry generated a positive return of 30.3%, the stock returned only 21.4%.
The underperformance of the stock could be due to the ongoing and heavily time-consuming business model transition to the cloud. Further, sluggish IT spending, particularly in on-premises and data center hardware, and foreign exchange volatility are concerns. Moreover, intensifying competition in the cloud is also a major headwind.
Nevertheless, IBM's strategic growth initiatives, including its Big Data & business analytics, cloud computing, mobile and social business, are expected to drive growth. In addition, the company’s policy of making strategic acquisitions will lead to incremental revenues, strengthen its technology leadership, thus resulting in a more favorable mix of business. The acquisitions have also increased its scale of operations globally.
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IBM and Cleveland Clinic Team Up to Enhance Health Care
International Business Machines Corporation (IBM - Free Report) and Cleveland Clinic recently inked a five-year agreement to enhance the health information technology capabilities of the latter. Cleveland Clinic will make use of IBM’s cloud platform, social, mobile and Watson cognitive computing technology. The objective of the agreement will be to establish a value-based health care system and to discover potential standards that could be adopted by health care providers across the nation.
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Health Care and Technology
The health care industry’s dependence on technology has increased significantly. The aim of the industry is to provide high-quality, more efficient and affordable health care through meaningful analysis of data that is readily available in the electronic health records (EHR) and administrative claims. This will not only enable a more personalized clinical care but will also help in population-focused management.
For example, with the help of technology, health care professionals will be better equipped to analyze which diabetes patients have become resistant to a certain type of treatment and change their course of treatment accordingly. Additionally, they will be able to ascertain, whether this particular trait is being exhibited by a certain section of the population so as to treat them in the best possible manner.
How IBM Fits into the Picture?
Per an IDC report, worldwide spending on cognitive systems and artificial intelligence is estimated to be over $47 billion by 2020 from nearly $8 billion in 2016 that represents a CAGR of 55.1%. Not surprisingly, there is stiff competition in the space, with the presence of some big players such as Alphabet (GOOGL - Free Report) owned Google’s DeepMind, Amazon’s (AMZN - Free Report) Amazon AI and Microsoft’s (MSFT - Free Report) Microsoft Artificial Intelligence and Research Group.
Recently, IBM announced that Unruly – a British ad tech company – will use Watson to build a new cognitive powered psychographic targeting tool to make digital video ads more audience targeted and thus more effective. (Read More: IBM Watson to Make Unruly's Digital Video Ads More Targeted).
In Oct 2016, IBM bought Promontory Financial Group – a Washington-based financial consulting firm – in a bid to broaden the reach of Watson into analysis of financial regulations and provide the most appropriate course of action to financial institutions. (Read More: IBM to Create Watson Financial Services with Promontory Buy).
During third-quarter 2016, IBM introduced Watson Conversation Service and Watson Virtual Agent for Customer Service. The service has already been selected by the likes of The Royal Bank of Scotland.
Given Watson’s popularity in the space, we anticipate more such adoptions in the future, which will definitely have a positive impact on the company’s bottom line.
Stock Performance Overview
Shares of IBM have underperformed the broader Zacks Computer Integrated Systems industry on a year-to-date basis. While the industry generated a positive return of 30.3%, the stock returned only 21.4%.
The underperformance of the stock could be due to the ongoing and heavily time-consuming business model transition to the cloud. Further, sluggish IT spending, particularly in on-premises and data center hardware, and foreign exchange volatility are concerns. Moreover, intensifying competition in the cloud is also a major headwind.
Nevertheless, IBM's strategic growth initiatives, including its Big Data & business analytics, cloud computing, mobile and social business, are expected to drive growth. In addition, the company’s policy of making strategic acquisitions will lead to incremental revenues, strengthen its technology leadership, thus resulting in a more favorable mix of business. The acquisitions have also increased its scale of operations globally.
Zacks Rank
At present, IBM carries a Zacks Rank #3 (Hold). Microsoft is a better-ranked stock in the broader technology space, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>