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IBM splashes a BEEELLLLION dollars on med pics biz

Big Blue buys more to feed its IBM Watson health monster

Crop of doctor with pen and clipboard

IBM is splashing $1bn (£644m) to buy medical image handling and processing biz Merge, part of plans to beef up its Watson Health division unveiled in April.

In January, Big Blue formally wheeled out Jeopardy! contestant Watson from storage and opened its IBM Watson unit, intended to commercialise cloud-based cognitive computing technologies.

It said the latest deal will enable its Watson tech to crunch medical imaging and gain insight into patient healthcare records. Merge’s technology platforms are used at more than 7,500 US healthcare sites.

John Kelly, senior veep at the IBM Research and Solutions Portfolio, said: "Healthcare will be one of IBM’s biggest growth areas over the next 10 years, which is why we are making a major investment to drive industry transformation and to facilitate a higher quality of care."

IBM has been desperately trying to re-invent itself in an attempt to revive its falling profits, which last month shrank again for the thirteenth consecutive quarter.

IBM's quarterly net income of $3.45bn was 16.3 per cent lower than in the year-ago period.

In June, Big Blue announced it was hopping into bed with Box, a move intended to satisfy their respective desires for cloud and scale.

The companies intend to integrate their technology, including IBM content management, Watson analytics and IBM Verse and Connections social collaboration tools.

It has also partnered with Apple to crunch cloudy healthcare data obtained from Cupertino's watches.

Mike Rogers, analyst at Megabuyte, said of the latest deal: "Although the Merge deal – Watson's third such health-related acquisition – was completed at a chunky multiple, it may be worth every penny should IBM realise the potential value of Merge's technology platforms over time." ®

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