IBM announced it will invest $3 billion over the next four years to establish a new Internet of Things (IoT) business unit.
Big Blue also said it is building a cloud-based open platform to help customers and ecosystem partners build IoT solutions. The company also is creating new IBM IoT cloud services to drive insights into business operations. More than 2,000 IBM consultants, researchers and developers will support the new IoT initiative and help enterprise clients gain new insights.
“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.”
Picciano said 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. These range from water management, to optimizing retail and customer loyalty, to alleviating traffic congestion. IBM provides enterprise IoT implementations that securely combine and analyze data from a wide variety of sources.
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. 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. The resources will also help business leaders across industries create systems that better fuse enterprise and IoT data to inform decision-making.
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. As much as 60 percent of this data begins to lose value within milliseconds of being generated.
To address these challenges, IBM said it will offer three core components: IBM IoT Cloud Open Platform for Industries, IBM Bluemix IoT Zone and the IBM IoT Ecosystem.
The IoT Cloud Open Platform for Industries will provide new analytics services that clients, partners and IBM will use to design and deliver vertical industry IoT solutions. For example, IBM will introduce a cloud-based service that helps insurance companies extract insight from connected vehicles. This will enable new, more dynamic pricing models and the delivery of services that can be highly customized to individual drivers, IBM said.
The IBM Bluemix IoT Zone will offer new IoT to enable developers to easily 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 further automate and optimize mission-critical IoT processes, according to IBM.
The IBM IoT Ecosystem expands IBM’s IoT partners which include silicon and device manufacturers and industry-oriented solution providers, including AT&T, ARM, Semtech and The Weather Company. IBM said the inclusion of partners ensures the secure and seamless integration of data services and solutions on IBM’s open platform.
IBM Pours $3B Into New IoT Business Unit
“This is an important development for IBM and the success of the Internet of Things industry,” said Vernon Turner, senior vice president and head of the IoT team at IDC. “With this announcement, IBM is giving IoT a legitimate sponsor similar to the need for an anchor store in a luxury mall. IBM had been slower to the IoT market compared to the likes of Cisco and GE, but in this case, we feel that IBM has identified correctly the area where much of the IoT business value can be created – at the IoT Platform layer. However, IBM’s success will be marked by the number of ecosystem partners it can recruit to build the hundreds of thousands of IoT applications for the billions — 29 billion — of connected devices.”
IBM said it will activate consultants from IBM Digital Operations Consulting Services, which already has helped thousands of companies achieve real business outcomes and pursue entirely new IoT-enabled business models fueled by mobility, cloud and analytical insight.
“The $3 billion investment that IBM is planning over the next four years is a hefty sum that indicates the company’s seriousness,” said Charles King, principal analyst at Pund-IT. “A lot of other vendors have talked up IoT but none made a commitment of the size and scope of IBM’s.”
King noted that the tie-ins between IoT and other IBM solutions are intriguing, especially those related to cloud, developers, Bluemix and the company’s partner ecosystem. That last point — partners — is especially important since by its nature, IoT will escape the grasp of any single vendor, he said.
“IBM’s focus on IT infrastructure makes it a natural leader in this space, but the company literally can’t be everywhere at once,” King said. “As a result, I believe that some of the most important and innovative developments around IoT are likely to arise through partnerships, so it’s worth keeping an eye on what IBM does here.”
IBM officials said the company’s IoT capabilities are illustrated in a new global strategic alliance, announced today, with The 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 10 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 to shape business outcomes and take action systemically to optimize those parts of their businesses.
“IBM is doing a good job of communicating the potential scope and importance of IoT,” King said. “The three business use cases cited in their announcement — insurance, retail and utilities — are easy to grasp and demonstrate the significant financial and business benefits IoT can offer. In the past year or two, many or most IoT discussions have tended to be pretty lofty and strategic. In contrast, IBM’s announcement aims to bring IoT back down to earth and shows how its planned solutions can make real differences in common business scenarios.”
Meanwhile, in conjunction with the formation of the new unit within its analytics business, IBM also announced the appointment of Pat Toole as general manager of Internet of Things and Chris O’Connor as general manager of Offerings for Internet of Things at IBM.
“By recruiting resources from its Smarter Planet divisions, IBM has pulled itself back into a legitimate contender as someone who understands the complexity of a highly- connected IP-based environment,” Turner told eWEEK.