IBM to Put US $3 Billion Into Connecting Enterprises to IoT

IBM to Put US $3 Billion Into Connecting Enterprises to IoT

U.S.-based technology giant IBM wants to connect the Internet of Things (IoT) to the enterprise, and will invest US $3 billion over the next four years to reach that goal. The company has announced that it will establish an IoT unit to drive insights into business operations and build a cloud-based open platform to help clients and ecosystem partners build IoT systems. IBM’s IoT Cloud Open Platform for Industries will provide new analytics services for IBM, clients and partners and will be used to design and deliver vertical industry IoT systems. For example, IBM will introduce a cloud-based service that will help insurance companies extract insight from connected vehicles. This will enable the implementation of more dynamic pricing models and the delivery of services customized to individual drivers.

IBM’s IoT ecosystem will expand, with partners ranging from device manufacturers to industry-oriented system providers such as U.S. telecom operator AT&T, U.K. semiconductor manufacturer ARM, U.S. semiconductor company Semtech and The Weather Company. The alliance with The Weather Company’s B2B division WSI will enable the analysis of massive amounts of data. WSI’s forecasting system generates 2.2 billion unique forecast points worldwide, and averages more than 10 billion forecasts a day. The IoT and cloud computing allow data to be collected from more than 100,000 weather sensors and aircraft, millions of smartphones, buildings and even moving vehicles. IBM and The Weather Company will help industries use their understanding of weather on business outcomes and take action systemically to optimize those parts of their businesses.

Tarifica’s Take

The Internet of Things is a rapidly growing phenomenon worldwide. We have written about it on a number of occasions recently, though mainly with regard to its applications in the consumer sector, such as smart-home technology. However, its potential in the enterprise sector is huge, and it makes sense that a giant technology developer such as IBM has seen that potential and made a substantial investment in it. By doing it via a cloud-based open platform, it makes access to the IoT easier for a wide variety of companies, and if that strategy might entail a certain surrender of control on IBM’s part, we believe that will be more than compensated for by the breadth of expansion of the IBM ecosystem, and therefore, ultimately of revenues.

The deal with The Weather Company has particularly great potential. As the provider of information for the weather apps for Apple, Google, and Microsoft, the company has a very large footprint. And weather data is an invaluable resource for industry as well as for consumers. By means of IBM’s IoT platform, The Weather Company’s enterprise division, BSI, will be able to connect more businesses with weather-data collection sources.

Mobile operators also participate in the IoT, if only by providing the connectivity. Here, a non-MNO entity has provided the platform, and that could be considered a challenge for MNOs to try and compete in the sector by creating their own branded IoT platforms or systems for their enterprise clients. One of IBM’s partners in the Cloud Open Platform for Industries initiative is AT&T; while its role is not yet clear, it could point a path for other operators toward exploiting the expanding IoT sector.

Other Notable Developments

Mobile subscribers in Argentina sent a total of 10.11 billion SMS during February 2015, down 7.2 percent compared to the same months the previous year, according to national statistics bureau Indec. Compared to the previous month, the number of sent SMS decreased 11.1 percent. This is an example of the global trend, visible in both developing and developed markets, of free or very low-cost OTT services taking market share away from mobile operators’ SMS offerings.