IBM now owns the weather. Well, almost. In a deal that signals a major shift to selling insights generated from owning both data and analytics, IBM announced plans to acquire several pieces of The Weather Company's assets and use them in a foundation for its Internet of Things (IoT) cognitive computing efforts and as parts of the company's Insight cloud services announced earlier this week. Terms of the deal were not disclosed.
IBM essentially purchased all the forecasting, analytics, and data assets, and also all of the brands and applications except for The Weather Channel television property. The deal includes The Weather Company's B2B, mobile and cloud-based Web properties, including WSI, weather.com, Weather Underground, and The Weather Company brand. The Weather Channel TV segment of the company will license weather forecast data and analytics from IBM under a long-term contract.
[Looking for more on IBM's Internet of Things Foundation plans? Read IBM, Jasper Partner For IoT Services Platform.]
"I think [this deal] signals a major shift from IBM in their software business," Brian Hopkins told InformationWeek in an interview. Hopkins is vice president and principal analyst for enterprise architecture at Forrester Research. The Weather Company deal gives IBM the data for insights about everything geophysical going on with the planet, he said. It also moves IBM into a new business.
There's not a lot of growth on legacy tech products such as DB2, Hopkins said. "The growth is in these insight services powered by cognitive technology that has the data, the content," he said. "It's a completely new business model."
Such information could offer big value to organizations whose operations are effected by weather conditions, such as insurance companies, retailers who see slowdowns during bad weather, and any company focused on transporting goods or people from one place to another. Those are merely the obvious ones.
IBM noted that weather is one of the single largest swing-factors in business performance, impacting one-third of the world's GDP. It's responsible for about a half trillion dollars in impact in the US alone. Then there's the scope of the data owned by The Weather Company.
"The Weather Company’s extremely high-volume data platform, coupled with IBM’s global cloud and the advanced cognitive computing capabilities of Watson, will be unsurpassed in the Internet of Things, providing our clients significant competitive advantage as they link their business and sensor data with weather and other pertinent information in real time," said John Kelly, senior vice president for the IBM solutions portfolio and research, in a prepared statement. "This powerful cloud platform will position IBM to arm entire industries with deep multimodal insights that will help enterprises gain clarity and take action from the oceans of data being generated around them."
The Weather Company's models analyze data from three billion weather forecast reference points, more than 40 million smartphones, and 50,000 airplane flights per day, IBM said in the statement. It offers a broad range of data-driven products and services to more than 5,000 clients in the media, aviation, energy, insurance, and government industries.
The announcement today builds on one from earlier this week at IBM's Insight conference in Las Vegas – the introduction of IBM Insight Cloud Services -- essentially, an insight-as-a-service offering. These can be accessed in several ways, IBM said, including via APIs for developers and via IBM Insight Data Packages for Weather.
IBM announced new bundled data sets from IBM and The Weather Company customized for specific industries and available on the IBM Cloud. Data feeds include real-time alerts for severe weather, seasonal forecasts, and other information. IBM said use-cases could include insurance companies warning policy holders of hailstorms that could cause property damage and helping utilities forecast demand and identify likely service outages.
This is not the first time IBM has acquired a company that owns a data stream. In April, IBM announced plans to buy Explorys, a company that it said owns one of the largest clinical data sets in the world.
Deals like that one and today's Weather Company acquisition signal a new move in the marketplace.
"This deal is a recognition of the economic value of data," Hopkins said.