IBM buys Expert Personal Shopper from Fluid to build out Watson’s conversation skills

IBM has made another acquisition to beef up its Interactive Experience division specifically to work more closely with Watson — a week after it announced a raft of new features and milestones for its artificial intelligence effort. It has acquired a business called Expert Personal Shopper (XPS), a platform, and bot, that holds conversations with people online to help figure out what they need to buy, and to help them buy it. XPS had originally been built by Fluid, a strategic partner (and investment) of IBM’s.

As with previous IBM acquisitions, the financial terms of the deal are not being disclosed, but Paul Papas, IBM’s global leader for Interactive Experience, told me that it includes XPS’s technology, the talent that built it, and XPS customers.

This is the fifth acquisition IBM has made this year to build out its Interactive Experience division. Others have included, Aperto, and Resource/Ammirati. IBM has also made acquisitions to enhance the Watson dataset, such as its purchase of The Weather Company, a deal thought to be in the region of $2 billion.

XPS was built by Fluid originally to oversee shopping experiences. Two notable examples where it has been used are in a service for Northface and another for 1-800-flowers (you can see how they work by clicking on these company links).

This will potentially give IBM — and its clients — a lever to compete against gigantic e-commerce portals like Amazon, which are able to dominate in many cases because of other convenience factors, but inevitably take away from the pull (and margin) of these brands.

Further down the line, John Armstrong, North America leader for IBM’s interactive practice, tells me that it is capable of more, and IBM plans to take it there.

“The first couple of applications have been to efficiently buy things and we have gotten great results, but we see it as a platform to efficiently service and inform about a number of things,” he said. “People can use XPS to complete whatever it is that they are trying to accomplish.” This is notable considering that IBM has very high ambitions in non-commerce areas as well like health, government and security.

IBM has talked a lot about its Watson ecosystem — essentially looking to partners to build lots of applications to sit on top of its platform as a way of expanding the service and customer base more rapidly and to bring in a lot of more data to its analytics platform. It’s interesting that in this case, IBM thought it was important to own that piece of the ecosystem.

“This is such a strategic solution that we believe with our scale we could do more with it,” said Papas.

Or as Armstrong put it, XPS essentially has created what IBM believes will be the future of how people interact with commerce (and other) services in the future. “This is modern commerce defined,” he said. “We’re giving relationship management similar to what customers would get in store.” It helps, too, that IBM is also getting two key clients as part of the deal, Northface and 1-800-flowers.

Papas added that buying all of Fluid was not something that IBM intended to do at this point because of the strong customer overlap that the two already had, but that it wouldn’t rule out more acquisitions to build out Watson’s capabilities and dataset in the future.