IBM's Watson loses its head

The person in charge of the Watson group abruptly leaves IBM. Why?

IBM has gotten a lot of mainstream press coverage out of Watson, the advanced artificial intelligence system able to answer questions asked in natural language. It cleaned the clocks of human competitors on the game show Jeopardy in 2011 and IBM looked to capitalize on that in a big way.

CEO Virginia Rometty said she wants Watson to be a $10 billion business by 2018, and Manoj Saxena was supposed to be the executive to lead that charge. Well, the Wall Street Journal reports that Saxena has left IBM to join The Entrepreneurs’ Fund, a Silicon Valley venture capital fund. Saxena came to IBM in 2006 when it acquired the company he founded, Webify Solutions, a provider of industry-specific software and services for building service oriented architectures (SOA).

While Saxena will serve as an advisor to Michael Rhodin, the IBM senior vice president who has taken over management of the Watson project, it's a blow to IBM, which has been trying to make Watson into a money-making business and not just a science project. Saxena has been the one who got it this far, including the Jeopardy appearance.

Last year, Saxena said that he was planning on Watson being a $1 billion business by 2018. As of late October 2013, Watson had total revenue of less than $100 million. Rometty then set the bar way higher, and this past January, IBM announced it would invest more than $1 billion in a new business unit for Watson, plus $100 million in VC funding for third-party software developers.

Last fall, IBM announced it wanted to open up Watson to software developers and create something similar to the Apple App Store. It's gotten interest. IBM said more than 1,500 individuals and organizations have contacted it to explore working with Watson. While it has interest, Watson also has competitors, like HP's Autonomy and Palantir, the mysterious startup in the Silicon Valley known for having security guards with earpieces who look like Secret Service agents.

But Saxena pointed out that the App Store model is not exactly a gold mine for everyone involved. "Out of the 300,000 applications in the Apple iTunes store, probably only 100 make money," he told the Journal. While his number on App Store apps was off, he has a point.

The Journal noted that just four months ago, Saxena was telling people what a great opportunity it was to work on technology that could cure cancer. Memorial Sloane Kettering Memorial Hospital is a Watson customer. So what changed in those four months?

I can't help but wonder if Saxena bailed because he knew this wasn’t going to work and he decided to get out while the getting is good. With The Entrepreneur's Fund, he's back on familiar territory – supporting and nurturing startups. But now he doesn't have to get Watson to an unrealistic level of income.

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