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Former IBM Execs Think Up Smart Cloud Platform

Startup Cognitive Scale emerged from stealth with a cognitive cloud platform aimed at four industry verticals.

A new company has emerged from stealth with a cognitive cloud platform that seeks to rein in unruly dark data in what it bills as "Insights-as-a-Service."

Austin, Texas-based Cognitive Scale formally announced itself as a player in the cognitive computing space this week.

The company's technology is initially aimed at the health care, travel, financial services and retail industries, and it counts IBM and Amazon as technology partners. It recently began looking into Google and Microsoft Azure among other partnerships.

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"If you look at our value proposition, just at a 50,000-foot view, we're the better, faster, cheaper pitch," said Founder and CTO Matt Sanchez. "What we're talking about is cognitive apps versus traditional apps and what the potential is around cognitive apps."

The company's technology takes the concept of big data a step further by making sense of what's known as dark data. This is the boatload of unstructured information floating out there, ranging from employee or payroll files to online customer reviews on Yelp, photos, images, posts and more. The challenge for companies is that's all information that is hard to process and usually goes uncollected and left out of the equation when data is analyzed.

So Cognitive Scale adds a cognitive computing layer to infuse the analysis process with intelligence. That is, the more information the app collects, the smarter it gets.

Perhaps one of the greatest advantages in how the platform gets its smarts is in the Cognitive Scale executive team, which is a mash-up of various former IBM executives, some of whom worked on the company's Watson computing system, known for its win on Jeopardy in 2011.

Sanchez previously headed up IBM Watson Labs, where he developed the first commercial apps for the financial services industry. Chairman Manoj Saxena was the general manager of IBM Watson, tasked with overseeing the division. He's also a founding managing director of the San Mateo, Calif.-based venture fund, The Entrepreneurs' Fund, which provided Cognitive Scale with an undisclosed amount of seed money. CEO Akshay Sabhikhi previously headed up IBM Smarter Care.

Cognitive Scale counts Deloitte among its technology partners, but is also the firm's technology provider as Deloitte builds up a practice around cognitive analytics aimed at the health care and life sciences industries.

The company said it's on track to end the year with "multimillion dollars in revenue," although Sanchez declined to provide an actual revenue figure. It counts a team of some 50 workers with an additional office in India.

Most of the company's revenue is being generated direct, but Sanchez sees the company's indirect channels growing "pretty significantly" over the next year.

"Our goal overall is to have a pretty healthy mixture [of direct and indirect]," he said. "We're not looking to just rely on channel partners. We're not oblivious to the fact that our sales channel will be a mixture over time. Our strategy was, 'Let's do both simultaneously but not too many'. ... We want to make sure we really mature our products."

The company is now in its Series A phase, but Sanchez said it's cautious about growth, operating with a "nail it before you scale it" mentality.

"We're trying to get the momentum there, so when we're ready to flip the switch and scale, we're ready to go," he said. "Things are cranking along quickly."


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