IBM is giving a whole new meaning to the term cloud computing. Big Blue announced on Wednesday that it has purchased almost all of The Weather Company, including Weather.com but not the Weather Channel TV network, .
For IBM, the most valuable part of the reported $2 billion deal is the weather forecasting data and technology — and The Weather Company has a huge amounts of such data. WSI, the company’s forecasting group, uses 3 billion weather forecast reference points, collected from locales including airplane flights and smartphones, to process 100 gigabytes of weather data each day. On Sunday, IBM and The Weather Company revealed a partnership with Twitter to use social media to develop weather insights, another relationship that’ll help expand part of IBM’s Watson platform.
Access to enormous amounts of data will allow IBM to refine its algorithms and produce more precise weather data than what’s currently available, the company says.
That weather data can be hugely valuable because there’s a lot more riding on forecasts than just whether or not you should wear a scarf or take an umbrella. Billions or even trillions of dollars in business planning decisions are at stake. Drug companies and pharmacies use weather forecasts to determine when to increase supplies of allergy medications. Retailers are able to anticipate a sales slump if they’re aware of when a snowstorm will hit. Agriculture companies rely on weather data in order to maximize returns on crops. Insurance companies can warn their policyholders about dangerous weather conditions before they are affected.
In the U.S. alone, businesses lose $500 billion due to weather. IBM’s ultimate hope is that by combining the weather data and forecast information with its cloud computing technology and analytics know-how, it’ll be able to sell reliable weather data to businesses within a number of industries.
The deal serves as the foundation for IBM Watson’s new Internet of Things (IOT) unit and the Watson IOT Cloud Platform, a $3 billion initiative that IBM announced in March to create a common platform on which customers can take advantage of the wealth of information IBM has. The platform may be useful to data scientists, business professionals and software developers.