IBM Pumps $3 Billion Into Internet Of Things

IBM is doubling down on it Internet-of-Things offensive, promising to spend $3 billion over four years developing a portfolio of cloud services and software aimed at delivering weather-related services to the enterprise. As part of the IoT investment, revealed Tuesday, IBM said it has entered into a partnership with The Weather Company to shift its suite of weather data services to its cloud.

The partnership between IBM and The Weather Company, parent company of The Weather Channel, will integrate realtime weather data with IBM's Watson-based cloud analytics portfolio. Both companies said they will be working on enterprise weather data services catering to the insurance, energy, retail and logistics industries.

"Any time IBM can wrap its arms around more data, it adds value to the IBM ecosystem," said Eric Alterman, founder and CEO of Flow Corp., a New York-based IBM partner that creates and sells IoT solutions based on IBM technology.

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"This is not just about the technology or the data. It's about both," Alterman said. "IBM has a very specific set of advanced skills in analytics and technology. Whether it's Twitter or The Weather Company, when IBM can take data and turn it into valuable insights, that makes me better at delivering my customers more value."

The IBM and Weather Company partnership will focus on delivering the business services Watson Analytics for Weather, Cloud, and Mobile App Developer Tools and Business and Operational Weather Expertise.

One possible solution, cited by IBM, includes an insurance company sending text alerts to customers warning them of an impending hail storm. According to IBM, insurers spend $1 billion in hail damage claims each year. Hail warnings encouraging insurers to move their cars before an impending storm could save an insurer millions of dollars a year.

"Together, we'll help businesses and governments transform their decisions and operations around weather fluctuation at a scale that hasn't been possible until now," David Kenny, chairman and CEO of The Weather Company, said in a statement.

The partnership comes on the heels of several other similar deals with Apple and Twitter, where IBM acts as a catalyst to help give companies a leg up into the enterprise. This month, IBM inked a deal with Twitter to leverage its Watson Analytics technology to turn billions of daily tweets into actionable business intelligence.

"It's one thing to have the data from sensors; it's another thing to be able to do something with that data," Alterman said. IBM's unique challenge, he said, is not just to use the data at rest, but rather to use it in realtime to make business decisions on the fly. "Data is power. Bringing weather data to agriculture, finance and industrial applications can give those industries an important edge."

Ginni Rometty, chairman, president and CEO of IBM, has been pushing IBM to focus on higher-margin business opportunities. She has long maintained that harvesting and mining data for business intelligence will impact the economy as much as the Industrial Revolution has. Data is like oil -- business needs help refining it, she has said.

PUBLISHED MARCH 31, 2015