Information Technology

IBM Bets $3 Billion on IoT

01 April 2015

IBM Corp. says it is planning to spend $3 billion over next four years to create an Internet of Things (IoT) business unit. As part of that objective, IBM wants to create a cloud-based open platform that will allow multiple industries to make use of IoT data while IBM will itself offer IoT consultancy services to help enterprise clients understand the meaning of the data it has collected.

IBM claims it leads the world in providing enterprise IoT systems that combine data from multiple sources securely and then provide analysis. It also wants to provide industry-specific cloud data servicers and developer tools. The creation of an open-platform that is widely used will provide a target for manufacturers of connected devices, IBM says.

IBM hasn't said how many people will be employed in the IoT business unit, but the company is planning an online event April 9 to discuss how IBM will bring IoT to the enterprise. It also says that Pat Toole will be the IoT business unit's general manager. Toole is currently listed as a general manager for Power and Z Systems in the IBM Systems and Technology Group.

Weather Forecast

For its first major partnership under the initiative, IBM is working with WSI, the business-to-business subsidiary of the The Weather Co. WSI will move its weather data services onto IBM's data servers so that customers can use IBM analysis tools on the data. IBM is hoping that companies will be able to combine live weather forecasting with a range of business data so that companies can adapt to buying patterns or supply chain issues that are weather-dependent.

WSI's forecasting system processes data from thousands of sources, resulting in approximately 2.2 billion unique forecast points worldwide, and the company averages more than 10 billion weather forecasts a day on active weather days, IBM says. It is not clear how much IBM is paying WSI for the weather data.

IBM will also introduce a cloud-based service that helps insurance companies extract insight from connected vehicles and develop dynamic pricing models and services that are customized to individual drivers. IBM says that 90% of the data generated by devices such as smartphones, tablet computers and connected vehicles and appliances is never analyzed or acted on.

"Our knowledge of the world grows with every connected sensor and device, but too often we are not acting on it, even when we know we can ensure a better result," said Bob Picciano, senior vice president of IBM Analytics, in a statement. "IBM will enable clients and industry partners to apply IoT data to build solutions based on an open platform. This is a major focus of investment for IBM because it's a rich and broad-based opportunity where innovation matters."

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