Francisco Partners scoops up bulk of IBM’s Watson Health unit | TechCrunch

In what has to be considered an anticlimactic ending, IBM sold off the data assets of its Watson Health unit to private equity firm Francisco Partners today. The two firms did not share the purchase price, but previous reports pegged the value at around $1 billion.

Francisco Partners scoops up bulk of IBM’s Watson Health unit | TechCrunch

Ooof! That’s gotta hurt.

IBM is making this sale just as the healthcare vertical is heating up. Last year, Oracle bought health records company Cerner for $28 billion and Microsoft bought Nuance Communications in a deal valued at nearly $20 billion. While both deals are pending regulatory approval, it shows how much large companies value the health vertical.

As a result, it was a move that clearly caught Patrick Moorhead, principal analyst at Moor Insights & Strategy, by surprise. “I am very surprised because the puck is moving to more vertical solutions. I suppose it also shows potentially how poorly the unit was doing.”

Yes, I’m seeing a verticalization of products and services. It’s funny how this pendulum swings. First, it’s on-premise, now it’s cloud, and it might go back to on-premise again in the future.

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