Proving the Business Case for the Internet of Things

IBM invests $3bn in IoT business unit

Steve Rogerson
April 2, 2015
 
IBM is to invest $3bn over the next four years to establish an IoT unit, and it is building a cloud-based open platform designed to help clients and ecosystem partners build IoT products and services.
 
The company’s work in smarter planet and smarter cities was based on practical applications of IoT in the enterprise and led to a broad set of services, ranging from water management to optimising retail and customer loyalty to alleviating traffic congestion.
 
With industry-specific cloud data services and developer tools, IBM aims to build on that expertise to help clients and partners integrate data from an unprecedented number of IoT and traditional sources. These resources will be made available on an open platform to provide manufacturers with the ability to design and produce connected devices that are better optimised for the IoT, and help business leaders across industries create systems that better fuse enterprise and IoT data to inform decision-making.
 
“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 at IBM Analytics. “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.”
 
IBM estimates that 90 per cent of all data generated by devices such as smartphones, tablets, connected vehicles and appliances are never analysed or acted on. As much as 60 per cent of those data begin to lose value within milliseconds of being generated. To address this, IBM is announcing it will offer anIoT cloud open platform for industries. This platform will provide analytics services that clients, partners and IBM will use to design and deliver vertical industry IoT products. For example, IBM will introduce a cloud-based service that helps insurance companies extract insight from connected vehicles. This will enable more dynamic pricing models and the delivery of services that can be customised to individual drivers.
 
IoT services as part of IBM’s Bluemix platform-as-a-service will enable developers to integrate IoT data into cloud-based development and deployment of IoT apps. Developers will be able to enrich existing business applications – such as enterprise asset management, facilities management and software engineering design tools – by infusing more real-time data and embedded analytics to automate and optimise mission-critical IoT processes.
 
Expansion of its ecosystem of IoT partners – from silicon and device manufacturers to industry-oriented service providers – such as AT&T, ARM, Semtech and newly announced Weather Company – to ensure the secure and seamless integration of data services on IBM’s open platform.
 
IBM’s capabilities are illustrated in a global strategic alliance announced today with Weather Company through WSI, its global B2B division. WSI’s forecasting system ingests and processes data from thousands of sources, resulting in approximately 2.2 billion unique forecast points worldwide, and averages more than ten billion forecasts a day on active weather days.
 
The IoT and cloud computing allow for collection of data from more than 100,000 weather sensors and aircraft, millions of smartphones, buildings and even moving vehicles. The two companies will help industries use their understanding of weather on business outcomes and take action systemically to optimise those parts of their businesses.
 
The new unit will be led by Pat Toole as general manager.