IBM's Weather Company Acquisition Is Steeped in Data
IBM will acquire The Weather Company's b-to-b data services and digital properties, adding a massive set of real-time meteorological information, infrastructure and related services to Big Blue's portfolio. The purchase solidifies a partnership between the two firms, and reasserts IBM's global cognitive business mission, which is inherently linked to the Internet of Things.
The Weather Channel, Weather Company's best-known entity, is not part of the deal. Instead, IBM will license its newly acquired forecast data and analytics back to Weather Company's TV operation through a long-term contract. The companies did not reveal the terms of the deal, which was reported by The Wall Street Journal to be valued at more than $2 billion.
Even a few years ago the thought of a large technology and consulting giant like IBM buying a company best known for its media brands would have seemed like a questionable move, but today's near-obsessive focus on data is forcing businesses to gaze through a different lens. Indeed, rather than perceiving the deal as a tech firm buying a media firm, it might be best thought of as a tech consultancy buying a data services firm.
"It's really about combining two of the world's largest digital and data cloud platforms plus analytics and cognitive capabilities together to really transform every business," said Inhi Suh, VP-strategy and business development analytics at IBM.
The agreement brings the Weather Company's WSI business (Weather Services International) to IBM. WSI provides data and analytics services to a variety of industries including aviation, energy, insurance and media, and works with clients such as American Airlines, British Airways, United, Koch, Cargill, Shell, NBC, CBX, ABC and Fox. Also added to the IBM fold: Weather.com, Weather Underground and The Weather Company brand.
The Weather Company operates its popular Weather Channel mobile app and other products on a cloud-based data platform that IBM expects will enhance its own ability to process, analyze and disseminate data at high velocity. The system processes 26 billion API calls per day. Built for mobile data processing, it collects global data updated every 15 minutes, from turbulence data emanating from plane sensors to weather data measuring the elements on a city block level.
The Weather Company has partnered with Amazon Web Services for its cloud platform, but IBM and Weather Company declined to comment on the future of that relationship.
Following IBM's IoT goals, Weather Company and IBM partnered earlier this year to devise enterprise products and services, data packages and APIs for a variety of industries. The companies plan to continue developing a set of weather-data-fueled technology services already in the works providing insights for emergency management, health and retail clients. For example, data from smart windshield wipers could help companies better track traffic patterns or inform store inventory of rain gear.
IBM launched its Cognitive Business initiative, focused on its Watson cognitive computing technology, earlier this month, unveiling a sweeping change to the way it frames its business internally and its outward value proposition. The overarching project replaced the firm's Smarter Planet brand strategy, reflecting the groundbreaking impact of cloud computing and data analytics on the company and its clients.