At IBM's second World Of Watson (WOW) event in Las Vegas, CEO Ginni Rometty was interviewing Grammy Award winning music producer Alex Da Kid about how he had used IBM’s cognitive technology Watson to help develop his latest hit song, Not Easy. But Alex turned the tables; "I have a question for you", he said. "What inspires you?" Rometty seemed taken aback for a beat or two. "That’s not in the script," she exclaimed, but then after a long pause replied, "to change the world!"

And that pretty much sums up the company’s bold vision of "The Cognitive Era". If you haven’t seen either IBM’s Watson ads (my favourite: Bob Dylan & Watson) or the October 9, 2016 CBS 60 Minutes segment on Watson, here’s what it is: Watson is a next-generation artificial intelligence (AI) system that can take in huge amounts of data from virtually any source (including the spoken word) and learn from that data, interact with humans to learn some more, and make reasoned recommendations based on what it has learned. The more Watson learns, the smarter it gets. And finally, as CEO Rometty said at the WOW event, "Watson never forgets!"

Rometty and IBM view Watson not as a new kind of super computer but as an "embedded service" that can "augment" human intelligence in virtually any endeavour. IBM’s emphasis on "augmented intelligence" rather than "artificial intelligence" is an important distinction. According to Rometty, the intention is "man and machine", not "man vs. machine". Said the IBMer, "this is all about extending your expertise. A teacher. A doctor. A lawyer. It doesn't matter what you do. We will extend it." And Rometty claimed that by the end of this year, Watson will already have touched the lives of hundreds of millions of people in some way.

To illustrate the point, the IBM CEO invited General Motors CEO Mary Bara to talk about an IBM/GM collaboration called Onstar Go, a "cognitive platform" in new 2017 GM cars that will have the ability to warn about traffic jams along favoured routes, warn the driver about low-fuel conditions and even pay for gas from the vehicle dashboard or order a cup of coffee while on the way to the driver’s favourite coffee shop.

IBM’s ‘Moon Shot’

Most people will remember Watson as the super-computer that won on Jeopardy! five years ago, but since that time the technology giant has struggled to clearly delineate the value to businesses. The biggest and most compelling value that IBM has demonstrated to the world was that which was featured on the CBS 60 Minutes segment: oncology research. I won’t repeat the full story here (watch the 60 Minutes segment!), but it is truly mind-boggling. At the Las Vegas event, CEO Rometty called it IBM’s "moon shot". To highlight the collaboration between Watson and oncology researchers, Rometty asked Dr. Satoro Miytano of the University of Tokyo to explain. The doctor said, "understanding cancer is beyond human ability. But Watson can help consume and understand all the research in the world", to recommend the latest and most appropriate therapies for the treatment of cancer.

Impressive, but IBM’s task is to define whole markets beyond health research. Even after 50 years of development, AI is still an unknown quantity to many, and the notion that somehow machines will replace (not "augment") human decision making is abhorrent to many. A coffee-shop discussion about whether people will go for driverless cars can expose a truckload of pre- and misconceptions about AI.

Judging from the WOW event itself, the days of having to explain Watson to the technology community are over. In one short year, attendance at the event has grown from 1,000 to 17,000. There were so many attendees that the cavernous conference rooms at Mandalay Bay Las Vegas couldn’t contain everyone, and so IBM had to bus attendees over to the new 20,000 seat T-Mobile Arena. Now the challenge is to develop the use cases that will drive adoption, and it is still very early days, at least as pertains to the retail industry. But the potential is compelling.

The Weather Company story

My first thought when I heard that IBM had acquired The Weather Company in January 2016 was "cool… I guess!" But the value of the company to IBM came into clear focus at the WOW conference. CEO Cameron Clayton made the obvious statement that "weather affects everything", and then went on to show how The Weather Company with its detailed weather data coupled with Watson can help businesses transform from being reactive to pre-emptive. The example he used was American Airlines, whose planes now download turbulence data in real-time to Watson which can then offer turbulence avoidance guidance.

But what about retail? Clayton talked about Watson Ads, a new offering announced in June from the Weather Company that will make it possible for consumers to engage in two-way conversations through the ad, with Watson cognitive services listening in. The natural language data is "ingested", Watson can make sense of the question and offer advice. IBM is working with the Campbell’s Soup Company to offer ads for hot soup during cold and rainy weather, and allow consumers to ask questions related to the product, such as "what goes well with tomato soup?" IBM’s objective is to redefine what the term "one-to-one" marketing means in the world today. And since retailers tell us in our research that "personalisation" is a key concept for their strategies going forward, the connection is easy to see.

Beyond Watson Ads, The Weather Company’s CTO Bryson Koehler discussed something called JOURNEYfx, which offers first generation geo-locational data to advertisers for accurate targeting. According to the CTO, "a 20% increase in targeting accuracy causes a 400% increase in online traffic" (a nice number!). The service will use data gathered from approximately 200 million devices that have downloaded The Weather Company apps (where the consumer opts-in to the service by signing on), along with weather information, information about nearby places of commerce (for example, a coffee shop), social data, and retailer-internal data such as available inventory, price, and product info, and data from Internet of Things (IoT) devices (such as the car a consumer is in) to make timely and relevant targeted suggestions to consumers. According to the technologist, JOURNEYfx and overall data from The Weather Company data platform has scaled to 40 billion daily forecasts on average, processes 400 TB of data daily (60 TB being sensor data), serving 15 million users daily.

These ideas are only the beginning for the retail industry. Office supplies retailer Staples is using Watson in its next generation "easy system" to enable customers to quickly reorder supplies and chat about their office supply needs. Similarly, The Home Depot is using Watson’s augmented intelligence to enhance its 1-800 concierge services. And IBM has developed a concept called the Cognitive Rules Advisor, a service that helps marketers put together more targeted social promotions based on customer behavioral data (I previously covered this capability in a May 2016 Retail Paradox Weekly column entitled IBM Amplifies The Value Of Cognitive Computing).

Are you ready for Watson? Watson is ready for you

Bob Picciano, IBM’s SVP of IBM Analytics, stated that we are entering "the Cognitive Era", and that businesses are headed towards a "massive escalation of opportunity" with AI in general and Watson’s "augmented intelligence" in particular. In her keynote, Ginni Rometty outlined how cognitive computing will enable enterprises. The Cognitive Era will:

  • Enable deeper engagement with both employees and customers;
  • Make it possible for businesses to “scale expertise”, for example making expert information available to customer service representatives;
  • Enable businesses to "scale imagination";
  • Transform education;
  • Help devices interact intelligently with each other without requiring human intervention (an IoT value enhancer);
  • Change operations to be "real-time aware";
  • And fuel discovery and research.

To make it easier for businesses to get their arms around Cognitive's possibilities, Bob Picciano announced the Watson Data Platform, which he described as a "collaboration platform for data professionals". IBM believes that the value of cognitive is so compelling that it should be made available to everyone. To make that possible, the new service is being positioned as "self service analytics", with common interfaces, Watson enablement, and an open-source foundation. This may sound like a classic "taste and try before you buy" offer, and perhaps it is. But with its mission to be (according to Picciano), "simple, accessible, and immersive", it’s hard to ignore.

Retail analytics professionals need to give it a try. Maybe it will, as CEO Rometty said it should, transform your business.

This article originally appeared on The RSR Research website. It is reproduced with the organisation's permission.