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Case Study: What’s Up with IBM’s Watson?

Group A8: Jason Blackwell, Travis Dockery, Cori Fletcher, Alexandra Hodge, & Michael White

MIS535 Managerial Applications of Information Technology

Keller Graduate School of Management

Professor Lynn Risley

February 4, 2018

Table of Contents

Case Study: What’s Up with IBM’s Watson?..................................................................................3

11-13 How powerful is Watson? Describe its technology. Why does it require so much powerful


11-14 How “intelligent” is Watson? What can it do? What can’t it do?..........................................3

11-15 What kinds of problems is Watson able to solve? How useful a tool is it for knowledge

management and decision making?.................................................................................................3

11-16 Do you think Watson will be as useful in other industries and disciplines as IBM hopes?

Will it be beneficial to everyone? Explain your answer..................................................................3


Case Study: What’s Up with IBM’s Watson?

International Business Machines, or IBM as it is commonly known, has developed many

incredible advances in technology, their most formidable being their computer named Watson.

The project’s goal was to make natural language more easily and effectively understood for the

computer, thus creating the ultimate in Artificial Intelligence technology. Natural language is

something humans instinctively use and it’s not something that can really be formatted to be

understood by computers, hence Watson’s importance in this technological advancement. But

just how intelligent and powerful is Watson? And what can be expected of the system for the

future? This case study explores all of that and more.

11-13 How powerful is Watson? Describe its technology. Why does it require so much

powerful hardware?

IBM’s Watson computer was a trailblazer in technological processing and interpretation

of human language. Watson has the ability to deliver more than calculations and documents; it

can answer natural language questions posed by humans. This type of technology makes Watson

more equipped than any other computer before it due to its ability to organize thoughts and

converse with people. A major example depicting Watson’s computing power is when it made an

appearance on the game show, Jeopardy. In the initial man-vs-machine episode of Jeopardy,

Watson was able to stack up against two Jeopardy champions. This appearance clearly portrayed

the significant capabilities that Watson possessed. The computer had to be able to register the

intent of a question, search through millions of lines of text and data, pick up nuances of

meaning and context, and rank potential responses for the user to select, all in less than three

seconds. By the time you read through this sentence three seconds would have already gone by,

and that is an amazing concept to think on. Watson represents the next stage in the long effort to

develop a computer that can mimic human intelligence.

According to the textbook, the hardware for Watson used in Jeopardy consisted of ten

racks of IBM Power 750 servers running Linux, with fifteen terabytes of RAM and 2,880

processor cores, which is equivalent to 6,000 top-end home computers. This type of platform is

able to handle massive analytics at speeds required to analyze complex language and deliver

correct responses to natural language clues. The system is a combination of current and new IBM

technologies optimized to meet the specialized demands of processing the enormous amounts of

content. Watson leverages Natural Language Processing (NLP) to process extreme volumes of

text. Natural Language Processing is a field of computer science concerned with the interactions

between computers and human languages (Rhinehart, 2011). It describes a set of statistical and

machine learning techniques that allow text to be analyzed. The latest version of Watson is 24

times faster than the version used in the 2011 Jeopardy episode and it requires a complex amount

of technology and hardware in order to be able to quickly process and scan databases of


11-14 How “intelligent” is Watson? What can it do? What can’t it do?

Although Watson is highly intelligent and learning more and more every day, it wasn’t

always this way. In the beginning of its creation, the hardware it used that allowed it to defeat the

two most decorated Jeopardy winners was child’s play compared to what the processing system

can do now. But all that power needs to be able to do something productive and in order to

prepare for Jeopardy, researchers downloaded over ten million documents from encyclopedias

and Wikipedia, the International Movie Database (IMDB), and the entire New York Times

archive. Despite all of this technology and abundance of information, the computer was only

limited to the amount of data embedded in its system and all the content combinations that

included. Intelligence can’t be measured just by the contents of encyclopedias, IMDB, and the

New York Times, but there is something left to be said about what all of that content includes, and

that does mean the computer is quite intelligent.

When Watson was created, and all of that data was downloaded into its system, one

would think that would be the end of things; but no, it wasn’t. Watson is able to learn from its

mistakes and its successes and is expected to become more useful and powerful by learning from

new sets of experts in new fields of knowledge (Laudon, 2016, p. 459). By using different

variations of algorithms, Watson can analyze questions and answers to determine patterns and

similarities to give varying degrees of confident answers, which is basically just intelligence-

based guesswork. But its’ different technologies are also available to the public via the Internet

as a cloud service, which can be used by different industries. Developers can create mobile

applications and businesses based on cognitive computing because Watson provides the tools and

methodologies needed to work with its system. It also provides a content store and about five

hundred subject matter experts to help support developers in creating applications, such as the

application Memorial Sloan-Kettering Cancer Center created to assist patients by recommending

appropriate personalized cancer treatment options. This is just one example of the thousands of

possibilities Watson provides for its users.

Its greatest challenge, however, is expanding its knowledge domains, which consists of

an immense amount of work. It has to learn terminology for a specific area, understand its

language context, and coordinate appropriate questions and answers. But because it doesn’t yet

work with data from audio, video, and animations, or with languages other than English, it

cannot come up with its own ideas (Laudon, 2016, p. 460). Watson has trouble solving real-life

problems and its basic learning process has been difficult for IBM engineers to translate complex

issues into usable software. It remains to be said that although A.I. technology is the vision of the

future and may one day replace humans in many aspects of the world, the fact that it cannot feel

or experience complex emotions, and engineers cannot interpret those things into physical items

like software, is proof that humans are and will always be superior and more intelligent than any

technology we create.

11-15 What kinds of problems is Watson able to solve? How useful a tool is it for knowledge

management and decision making?

IBM’s main goal for Watson was to “develop a more effective set of techniques that

computers can use to process natural language – language that human beings instinctively use,

not language specially formatted to be understood by computers” (Laudon, 2016, p. 459). To do

this, developers of IBM downloaded over 10 million documents into Watson’s primary memory.

With many algorithms inputted into Watson, the system was able to correctly answer questions

based on facts and that also required knowledge. Future applications for Watson were numerous

and many applications included were in medicine, financial services, and any other industry that

screens through large amounts of data (through Watson) to answer important questions for their

specific industry.

Improving productivity and developing a more effective set of techniques that computers

can use to process natural language by humans, and not language specially formatted to be

understood by computers, is the overall goal of IBM Watson. As its core business declines, IBM

is counting on Watson to drive growth in new areas such as healthcare, analytics, and security.

Some industries may require anything from little technical knowledge to advanced data science


Because IBM couldn’t keep up with all the demands out there for different solutions,

Watson Developer Cloud was created to provide tools and methodologies for developers. A

content store supplies both free and fee-based data for new applications, and about five hundred

subject matter experts from IBM and third parties (Laudon, 2016, p. 460). Like Apple with its I-

phone and the App Store, IBM opened up Watson Application Programming Interfaces for

developers to plug their own programs into its cloud-based Artificial Intelligence system.

Although IBM’s Watson is an intelligent system that can determine treatments that are

most appropriate for patients, solve typical problems through algorithms, and learn from its own

mistakes, it fails to make critical decisions and lacks the expertise of an experienced professional

in any particular field. IBM is able to recognize and process information, but it has decreased

amounts of intelligence. In order to effectively commercialize the technology, IBM will need to

expand Watson’s knowledge domains, and this is its greatest challenge. Because of its inability

to come up with its own ideas, Watson has to learn the terminology and master the domains of

expertise in many different areas (Laudon, 2016, p. 461).

11-16 Do you think Watson will be as useful in other industries and disciplines as IBM

hopes? Will it be beneficial to everyone? Explain your answer.

The Watson supercomputer processes at a rate of 80 trillion floating-point operations per

second. To replicate or surpass a high-functioning human’s ability to answer questions, Watson

accesses ninety servers with a combined data store of over 200 million pages of information,

which it processes against six million logic rules. The device and its data are self-contained in a

space that could accommodate ten refrigerators. Applications for the Watson's

underlying cognitive computing technology are almost endless. Reason being, the device can

perform text mining and complex analytics on huge volumes of unstructured data, and it can

support a search engine or an expert system with capabilities far superior to any previously


In May 2016, Baker Hostetler, a century-old Ohio-based law firm, signed a contract for

a legal expert system based on Watson to work with its 50-human bankruptcy team. ROSS can

mine data from about a billion text documents, analyze the information, and provide precise

responses to complicated questions in less than three seconds. Natural language processing

allows the system to translate legalese to respond to the lawyers’ questions. ROSS's creators are

adding more legal modules; similar expert systems are transforming medical research. IBM

believes future applications for Watson are numerous and wide-ranging in medicine, financial

services, or any other industry where sifting through large amounts of data consistently is


At some point Watson will be useful for everyone and everything. It is almost as if

Watson can go through the process of trial and error at a very fast pace and can keep track of

methods and algorithms that do not provide the correct answer in order to get the correct answer

in the future. WellPoint Inc., a health insurer, uses Watson to assist in choosing among treatment

options and medicines. However, diagnoses are based as much on prior experience and good

guesses as they are on hard data. Artificial intelligence skeptics don’t believe Watson really

understands language or the answers it’s giving. IBM researchers who designed the system don’t

disagree. One of the drawbacks to employing Watson and its clones are the number of human

employees who will likely lose their jobs and require retraining for other job fields.


Gaudin, S. (2011, February 15). IBM’s Watson’s Ability to Converse is a Huge Advance for AI

Research. COMPUTERWORLD.COM. Retrieved from


Laudon, K. C. & Laudon, J. P. (2016) Management Information Systems: Managing the Digital

Firm. (15th ed.) Pearson Education, Inc. London, UK. pp. 458-460.

Rhinehart, C. (2011, January 17). 10 Things You Need to Know About the Technology Behind

Watson. Insights from a Business Builder and Fixer. Retrieved from