Reducing Turbulence? IBM Signs Deal to Sell Predictive Weather Channel Data To Clients

Big tech companies are trying to sign exclusive deals for unique data sources in order to distinguish their information offerings.

IBM has established something of a lead with its agreements to incorporate Twitter trends and now Weather Channel data in order to give an edge to clients attempting to discern the future.

Enterprises are using this information to predict consumer trends, optimize investment decisions - and avoid overpaying for anything except, of course, the data itself. JL

Steve Lohr reports in the New York Times:

Amazon, Microsoft, Google, Oracle and others are all trying to pull in as many interesting data sources as they can.Last fall, (IBM) forged a similar arrangement with Twitter, whose tweets are a global wellspring of consumer sentiment.

Data partnerships are a key ingredient in IBM’s long-term strategy, and the company is announcing a big one with the Weather Company.

For IBM, the deal represents another close link with a leading data supplier for special access and joint development. Last fall, it forged a similar arrangement with Twitter, the social network, whose tweets of 140 characters or fewer are a global wellspring of consumer sentiment.

IBM also said that it planned to invest $3 billion in the next four years to build up an Internet of Things business group. The two announcements are related since so much of the new data that corporations want to analyze to spot ways to increase sales and cut costs will increasingly come from Internet-connected devices, from smartphones to sensors.

The Weather Company is best known for its media properties like the Weather Channel and weather.com, but it is also a data heavyweight, gulping up 20 terabytes daily from weather stations, radar, satellites and small sensors. Its data powers the weather apps for Apple, Google, Microsoft and others. It also sells its weather data to thousands of companies, including airlines, retailers and insurers, and the unit that sells that information, WSI, is the company’s fastest-growing business.

“Google mapped the earth and we map the atmosphere,” said David Kenny, chief executive of the Weather Company.

To IBM, weather data is an indispensable asset. But it is a raw material to be fed through Watson, IBM’s artificial intelligence engine, and the company’s other analysis tools. The goal, said Robert Picciano, senior vice president for analytics, is to deliver a “new service for business, detailed weather information and insights for decision-making.”

The IBM-Weather Company announcement, said Frank Gens, chief analyst at the research firm IDC, is part of a larger trend of major tech companies trying to enhance their cloud-based technology with data for businesses and developers. “Amazon, Microsoft, Google, Oracle and others are all trying to pull in as many interesting data sources as they can,” Mr. Gens said.

In this deal, IBM got a win for its cloud business. The Weather Company had relied mainly on Amazon Web Services for its cloud computing, but for its business data service it will use IBM’s SoftLayer cloud technology.

To date, the Weather Company has sold its data mostly to companies, though it has jointly developed applications for specific industries, notably commercial airlines. For the airline industry, Mr. Kenny said, the company focused on using real-time weather data and sensor data on aircraft to help reduce turbulence in flights by as much as 70 percent. Beyond passenger comfort and satisfaction, turbulence consumes extra fuel and adds to wear and tear on planes, adding to downtime on the ground.

With real-time data, flight paths can often be altered to reduce turbulence. Mr. Kenny pointed to that as an example of the kind of improvement that weather data can make when combined with other information. The partnership with IBM, he said, should add more “science to what we can do. We’re going from data to decisions.”

One likely application, IBM said, was in auto insurance. Insurers pay more than $1 billion in claims in the United States for cars and trucks damaged by hail. Adding Watson analysis to WSI’s weather data, the company said, could enable insurers to send text-message alerts to policyholders, warning them of an imminent hailstorm and advising them of safe locations nearby. Such a service, IBM calculates, has the potential to save insurers up to $25 per policyholder in hail-prone regions, or millions of dollars a year