Big Blue bets a billion bucks; health tech to the fore

The stakes have been upped. It now takes a billion dollars to move the needle for an M&A story. Today it's IBM's turn.

doctor tablet

Somewhere in IBM's corporate headquarters there must be a computer system that is malfunctioning. This system is the one that controls capital expenditure, and the unlikely bug means that IBM can only invest multiples of a billion dollars in capital expenditures. Over the past few years, IBM has made multiple announcements of $1 billion investments in big data, cloud infrastructure and other cutting-edge technology. Today, it's the turn of health tech.

IBM is buying Merge Healthcare, a provider of medical imaging equipment. The aim of the deal is to integrate Merge's tools into the broader Watson health solution set. Watson is, as most people will remember, IBM's big data solution that famously won the Jeopardy! quiz show. And while the really important use case is winning game shows, there is also a degree of benefit to applying Watson technology to other areas. Healthcare is one of those areas.

Health tech has garnered massive attention of late. President Obama's desire to deliver efficiencies in the sector are one reason, but also, more generally, there is a growing awareness that technology can deliver a massive change in terms of increasing efficiencies in the health space. IBM is certainly chasing a very real opportunity.

Merge's solutions are, according to IBM staffers, used in over 7,500 healthcare establishments across the U.S. and will now be added into Watson's health-specific vertical, Watson Health Cloud. According to IBM, Merge will enable Watson to deliver "new insights from a consolidated, patient-centric view of current and historical images, electronic health records, data from wearable devices and other related medical data, in a HIPAA-enabled environment,” 

This deal isn't the first for IBM 's efforts to bolster Watson for health. It previously acquired Phytel and Explorys and just last week announced CVS as a major Watson health partner.

It will be fascinating to watch what success IBM sees in this area.

Copyright © 2015 IDG Communications, Inc.

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