00:00Another big acquisition for IBM. So how exactly are you going to use that data and when can you start really using that data to apply to your Watson technology Greg. Well Betty we're really excited about this acquisition today. And this is our third acquisition of data cloud based data in healthcare in the past few months. This data set though is very unique in that it's medical images. Our previous acquisitions and a lot of our development was was around electronic medical records right natural language. This is medical images. And as you look at health care why is that so important. Well it's very important because over 90 percent of the data in the health care industry is contained in images x rays MRI ise CAT scans huge amounts of data more data than most doctors can possibly deal with. We have some very unique technology in Watson our cognitive or artificial intelligence system which is capable of not only reading and understanding medical records but now we've fundamentally given what's an ise quote unquote to be able to see and understand images up to and including complex medical imaging. So what does what it does what's it going to do with that exact. So Watson will be able to look at complex CAT scans and MRI ISE and help a doctor understand what's going on. Is it a tumor or is it not a tumor or is it growing is it not growing . Look for subtle details in heart scans et cetera. OK. And is merge the biggest player in this because aren't there other bigger players in this space. And were they not attractive then . I mean why merge merge is the biggest player in what's called vendor neutral archiving and that's basically independent of the machine that's producing the image merges the largest in the vendor neutral area so it can handle images from all of the common equipment that she was. Why was that important vendor neutral you say why was that and that's important because we can have access to scans coming off all types of equipment in the industry. We can pull them up to our Watson cloud with the. Of course with the patient's permission we can provide the analysis of those images back to the doctor back to the health care provider. Another unique thing we can do because Watson though can only see it can read it can pull together a patient's history from their health care record along with the image and give the doctor for the first time a complete view of the patient. So how do you make money from this. Well we'll be offering insights back to the health care providers will improve the care which of course will reduce the cost and will be paid for those insights which are provided back to the doctor through Watson. Is that going to be immediate to you or how long will it take before you see these acquisitions. Well it will take us a couple of months to go through the approval process or this acquisition. We've already developed the Watson capability to see and read these images and it will take us a very short period of time into early next year to pull together the core merge health care capability with the Watson capability and get services to market. You see this being a profitable venture for you that very profitable venture in the next twelve months or in 2016 we will have products out in the market as a result of the combination and merge health care itself has a very good profitable business underlying its core business. We'll be adding to that with Watson you'll be adding on top of that . Okay. And you know you mentioned that that this is not this is your third acquisition in just the last few months I've been reading a lot of these headlines so why now. I mean why didn't you do this before. What's so special about the timing. Well we're very excited about the health care industry as an opportunity overall globally it's a seven trillion dollar industry. About half of that is in the United States. It's an industry that's being digitally disrupted all of the electronic medical records are becoming digital images et cetera. And frankly speaking the amount of information on patients and all of us now is surpassing what the doctors can deal with right . So new technology is required. We have a very unique technology with Watson that we think can contribute to helping the health care industry reduce costs and improve outcomes. So am I going to expect to see another headline relatively soon another acquisition. I mean are you you know full on you know on that trail in IBM we believe that this is a huge opportunity for IBM . This is one of our most important strategic initiatives. We believe that this industry holds the potential to be one of our biggest businesses and we believe that we can help transform this. We believe that this is one of our big Moonshot .

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IBM Buys Merge Healthcare to Boost Watson Health Cloud

IBM agreed to buy Merge Healthcare for $1 billion, to incorporate the medical company’s imaging management platform with its Watson data analytics tool. IBM Solutions Portfolio and Research Senior Vice President John Kelly speaks on "Bloomberg Markets." (Source: Bloomberg)