IBM to invest $3B in building Internet of Things business

31 Mar 2015 | Author: | No comments yet »

IBM Connects “Internet of Things” to the Enterprise.

International Business Machines Corp said it will invest US$3bil (RM11.14bil) over the next four years in a new ‘Internet of Things’ unit, aiming to sell its expertise in gathering and making sense of the surge in real-time data. IBM’s pioneering work in Smarter Planet and Smarter Cities was based on practical applications of IoT in the enterprise and led to a broad set of solutions, ranging from water management to optimizing retail and customer loyalty to alleviating traffic congestion.In New York City, Manju Malkani, IBM analytics consultant, and Paul Walsh, Vice President of Weather Analytics at The Weather Company, access real-time weather data through IBM Watson Analytics. The Armonk, New York-based technology company said its services will be based remotely in the cloud, and offer companies ways to make use of the new and multiplying sources of data such as building sensors, smartphones and home appliances to enhance their own products. For its first major partnership, IBM said a unit of the Weather Co will move its weather data services onto IBM’s cloud, so that customers can use the data in tandem with IBM’s analytics tools.

With new industry-specific cloud data services and developer tools, IBM will build on that expertise to help clients and partners integrate data from an unprecedented number of IoT and traditional sources. IBM General Manager Chris O’Connor will oversee the new unit, which will initially court enterprises in travel, logistics, insurance, public utilities, transportation and retail, Brethenoux said. With better weather data, insurance companies could alert policyholders via text message about impending hailstorms, for which vehicle damage claims total more than $2 billion annually, and direct them to safe areas. As a result, IBM is hoping that companies will be able to combine live weather forecasting with a range of business data, so companies can quickly adapt to customer buying patterns or supply chain issues connected to the weather. These resources will be made available on an open platform to provide manufacturers with the ability to design and produce a new generation of connected devices that are better optimized for the IoT, and to 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, IBM Analytics. “IBM will enable clients and industry partners apply IoT data to build solutions based on an open platform.

IBM will also tailor a new cloud service, the IBM IoT Cloud Open Platform, providing a way for enterprises to build their own data-driven systems, Brethenoux said. IBM, based in Armonk, New York, said Tuesday in a statement that it will also gain the right to resell data collected from a swath of Web-connected devices. 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 percent of all data generated by devices such as smartphones, tablets, connected vehicles and appliances is never analyzed or acted on.

Consumers have become more open to thinking about the possibilities of collecting, analyzing, and acting on such data — or data from sensor-packed industrial devices, for that matter. Or retail stores could compare weather forecasts with past data to predict surges or drop-offs in customer buying due to extreme weather, and to adjust staffing and supply chain logistics accordingly.

And in turn, the IoT has turned into something frequently cited by chipmakers, storage hardware makers, and networking hardware sellers, among others. IBM has faced three straight years of falling sales as demand wanes for legacy hardware and services and unprofitable units are divested. “We are going to monetize this through analytics, no question,” Joel Cawley, general manager of information and insight services at IBM, said in an interview. Areas hit with temperature drops of more than 10 degrees during the January 2014 polar vortex saw sales fall 15.5%, while those with declines of less than 10 degrees saw sales drop less than 3%.

IBM said it was already working with some large companies, such as German tire maker Continental AG and jet engine maker Pratt & Whitney to help them use data in their processes. Today, hinting at the industry interest in the IoT, IBM is pointing to its IoT-related business with several customers, including Whirlpool, SilverHook PowerBoats, and Carnegie Mellon University. The difference between a 90-degree day and a 95-degree day in Texas, for example, can result in a daily increase of $24 million in electricity spending.

The company is targeting US$40bil (RM148.6bil) in annual revenue from the cloud, big data, security and other growth areas by 2018, which should be about 45% of its total revenue at that time, based on analysts’ growth estimates. – Reuters IBM has a history of demonstrating its dedication to new initiatives on emerging technologies by associating dollar amounts — typically $1 billion — with them. Mark Gildersleeve, president of WSI Corp., Weather Co.’s professional division, said companies need to better manage weather-related issues. “Weather forecast skill has improved faster than general decision-making skill in businesses,” he said. IBM Bluemix IoT Zone: New IoT services as part of IBM’s Bluemix platform-as-a-service will enable developers to easily integrate IoT data into cloud-based development and deployment of IoT apps.

Most businesses “don’t anticipate the weather and don’t understand the things you can do to take action ahead of time.” Among retailers that have reported weather-related setbacks is Gap Inc., which blamed cold weather for sluggish sales in February 2014. IoT is just the latest area IBM is targeting to breath new life into its business, which has been struggling as sales from some of its traditional on-premises products, particularly hardware, decline. Chief Executive Officer Ginni Rometty is seeking to use the cloud to provide data and tools to clients and product developers working on devices that connect consumer goods like cars or appliances to the Web.

That allows pilots to avoid turbulence, reducing that by 70% for the average commercial flight. “That’s not only more pleasant for passengers but reduces wear and tear (on aircraft),” said WSI CEO David Kenny. Other industries learned about the improved data and looked to WSI to build systems for them to integrate it. “We don’t have that capacity,” Kenny said. The two companies will help industries utilize their understanding of weather on business outcomes and take action systemically to optimize those parts of their businesses. Cummins Inc. collects and transmits real-time performance data of its engines for predictive analysis with IBM IoT solutions to maintain higher operating levels and reduce downtimes.

SilverHook Powerboats is using IBM’s IoT Foundation service to access and analyze telematic and biometric data from its boats and pilots to make real-time racing decisions. IBM is engaged in a partnership with the University of South Carolina to produce more insights on predictive maintenance, combining deep industry expertise from the university’s Condition-based Maintenance Research Center with predictive analytics software and skills from IBM.

The Police departments of Durham, North Carolina, and Memphis, Tennessee work with IBM to collect data that canhelp them better target crime hotspots. Whirlpool Corporation is leveraging IBM’s IoT and predictive maintenance and quality solutions to improve the performance and reliability of its appliances. For example: Miami-Dade County, Florida is working with IBM on a Smarter Cities initiative to improve services for residents and help agencies share information among the 34 municipalities within the county. In Montpellier, France the fastest growing city in France, IBM Intelligent Operations delivered via the cloud helps the the District Council set up and experiment services for water management, mobility and emergency management.

In Melbourne, Australia, Yarra Trams is using IBM technology to access real-time information about service disruptions, tram performance and tram locations. ARM and IBM partnered to combine ARM’s leadership in the embedded market utilizing the ARM® mbed™ platform with IBM’s leadership in Big Data, Analytics and Cloud Services to provide an easy to use Starter kit, enabling IoT developers to rapidly achieve end to end development from device through cloud services.

IBM Research and Semtech announced a new technology based on low-power, wide-area networks that offers significant advantages over cellular networks and wifi for providing machine-to-machine (M2M) communications. To view the original version on PR Newswire, visit:

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