International Business Machines Corp. is exploring a potential sale of its IBM Watson Health business, according to people familiar with the matter, as the technology giant’s new chief executive moves to optimize the company and become more competitive in cloud computing.
IBM is looking at alternatives to the unit that could include a sale to a private equity firm or industry player or a merger with a blank check company, people said. The unit, which employs artificial intelligence to help hospitals, insurers and pharmaceuticals manage its data, has about $ 1 billion in annual revenue and is currently unprofitable, people said.
Its brands include Merge Healthcare, which analyzes mammograms and MRIs; Phytel, who assists in communication with the patient; and Truven Health Analytics, which analyzes complex health data.
It is not clear how much the company can make in a sale, and there may not be one.
IBM, with a market capitalization of $ 108 billion, was left behind while cloud computing rivals Microsoft Corp. and Amazon.com Inc. soar for ratings more than 10 times higher. The Armonk, NY, company said it is focused on boosting its hybrid cloud operations while closing some unrelated deals.