Fans of IBM (IBM 0.13%) have seen this movie several times in the last year: It's written yet another sizable check to bolster its new-ish Watson Health division. The latest move was IBM's $2.6 billion acquisition of Truven Healthcare Analytics announced on Feb. 18. Truven is one of four "major" healthcare-related deals in less than a year for its Watson Health unit.

Added to a bevy of smaller acquisitions to expand IBM's suite of solutions within its big data, cloud, and The Internet of Things (IoT) "strategic imperatives" efforts, it's safe to say there's a lot riding on CEO Ginni Rometty's transition plans. Once investors factor in the cost of starting new divisions like Watson Health, an IoT-specific unit, along with cognitive computing, the amount IBM has invested in its strategic imperatives is staggering. Following the $2.6 billion deal for Truven, IBM's cards are now definitely on the table.

Image source: IBM.

Does it matter?
The Truven acquisition pushed IBM's investment in its Watson Health division alone to over $4 billion in less than a year. With the aforementioned new business units and other, albeit smaller, deals to (hopefully) boost other key areas of growth added into the mix, IBM is on the hook for well over $5 billion -- so far.

Both IBM and its longtime partner (and sometimes competitor) Microsoft (MSFT 0.74%) reported a drop in revenue last quarter. There are a couple of notable exceptions between the two tech titans, however. For one, Microsoft is not only further down the path in its transition to its "mobile-first, cloud-first" initiatives, but just as importantly, it seems investors have bought in.

It doesn't hurt that Microsoft sits near the top of the cloud provider list with its more than $9.4 billion annual run-rate. By comparison, IBM reported an annual run rate of $5.3 billion last quarter: certainly respectable, but not quite in Microsoft's league. Another difference last quarter was Microsoft's expense management initiatives. Yes, revenue was down year over year, but so too was Microsoft's overhead.

IBM's expenses, on the other hand, grew last quarter to $6.3 billion, a 9% bump compared to 2014's Q4. Assimilating new people and technologies can be an expensive proposition. The decline in total sales, coupled with its increased spending, pushed IBM's expense-to-revenue ratio to 6.2%, up from 2014 Q4's 5.5%. Microsoft may be leading the cloud race, and it seems to have garnered more investor confidence, but IBM shareholders do have a few positives to hold on to.

Signs of life
Like Microsoft Azure, IBM also has a cloud platform: SoftLayer. While Platform-as-a-Service (PaaS) has quickly become a multibillion-dollar cloud industry in its own right, the real opportunity lies with software and detailed analytics. Amassing reams of data hosted in the cloud is only beneficial if analysis uncovers actionable results to improve efficiencies and marketing efforts.

With its cognitive computing wonder Watson, either specific to the healthcare industry or not, IBM's business analytics piece of its strategic imperatives pie is worth monitoring to determine what strides are being made. Collectively, IBM's strategic imperatives revenue jumped 17%, to $28.9 billion last year. Leading the charge is business analytics -- home to Watson and IBM's cognitive computing solutions -- with $17.9 billion in sales, a 16% improvement after accounting for currency.

Unfortunately, IBM has declined to provide specifics on how much of its business analytics revenue was derived from Watson. So, business analytic sales is about the only way to monitor IBM's Watson results to determine what kind of return on investment the series of acquisitions and partnerships are returning.

Watson-specific revenue may not be clear, but one thing certainly is following IBM's latest deal for Truven: Even the smallest hiccup in strategic imperatives in general, and business analytics in particular, would not sit well with investors. Nor should it, if it were to occur. But should Rometty and team continue to deliver in IBM's key markets, it may finally get growth and income investors -- IBM's dividend yield is nearly 4% -- back in the fold.