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Why IBM Is Dropping $2.6 Billion on Truven Health

February 18, 2016, 5:11 PM UTC

With IBM’s planned $2.6 billion acquisition of Truven Health, the company will add “200 million lives” to its data trove. “Lives” is a term typically used in the healthcare business for a data asset or record.

And when it comes to big data analytics, the more data, the better, said IBM (IBM) Watson Health general manager Deborah DiSanzo. Truven brings still more data into IBM, which has already assembled quite the data pool, both on its own and via acquisition.

With Truven, IBM gets “200 million lives which we can combine with 100 million patient records. We can combine our data sets together, including one of the largest democratized health records with electronic health records from Phytel, Truven, claims data, imaging data, genetics, medical health data and from all of that we can run analysis,” said DiSanzo told Fortune in an interview.

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IBM bought Phytel, a health management software company, for an undisclosed amount in May. With that deal, along with the $1 billion purchase of Merge Healthcare, a medical imaging company; Explorys, a Cleveland Clinic spinoff; and now Truven, IBM chief Ginni Rometty has spent more than $4 billion on health-related technology and data providers over the past year. That indicates how big a deal this business is to IBM and to Watson, its all-important cognitive computing product.

Truven, which has used IBM Cognos business intelligence software for years and has partnered with IBM’s Watson unit for the past 15 months or so, offers a wide array of data analytics services.

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It is, for example, the company behind the annual “100 Top Hospitals” survey, which crunches public data to rank the performance of U.S. hospitals both in terms of their current performance and their rate of improvement, Mike Boswood, chief executive of Truven, told Fortune.

The Ann Arbor, Mich.-based company has about 2,500 employees there and throughout the country, including a presence in Cambridge, Mass., where, conveniently, Watson Health is also located.

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So, the deal means more applications and data work for Watson, as well as some pretty impressive customers.

Truven claims 8,500 clients including hospitals, insurance companies, and federal and state agencies. Some big names include Cigna (CI), CalPERs, Hospital Corporation of America (HCA), Liberty Mutual Insurance, and Newton-Wellesley Hospital.

DiSanzo, unsurprisingly, is bullish on what Truven will bring to the table. She said that “this combination of data, analysis, and insights will help healthcare providers, payers, and individual consumers.”

Presumably it will also help IBM itself, although it is hardly the only tech power to see the opportunity in healthcare. Google (GOOG) is investing in healthcare startups and pushing the use of its data analytics tools for life sciences and medical research, as is Microsoft (MSFT).