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IBM Buys the Actual Clouds With Recent Purchase of The Weather Channel’s Digital Assets

Published onDec 02, 2015
IBM Buys the Actual Clouds With Recent Purchase of The Weather Channel’s Digital Assets

On October 28th, IBM announced its purchase of the Weather Company data assets.  This deal is reportedly valued at more than two billion dollars.  This purchase only included the Weather Company’s digital and data assets, including Weather Underground, weather.com, the WSI, and the company’s data driven business-to business arm.  What this purchase does not include is the company’s flagship network, which has recently been struggling with lost profits as there is a decline in year-to-year viewership of 7.6%.

IBM’s Watson computer, Yorktown Heights, NY

IBM plans to use their super computer, Watson, and pair it with the Weather Company’s powerful data ingestion platform.  The Weather Company’s data ingestion platform is records “maybe 15 times more data than even Google…[it] is the largest source of crowd sourced and engineered environmental data on the planet” states Ted Schadler, research analyst.  IBM hopes to use this pairing to create a predictive weather analytics solution that can transform industries and give them a cutting edge advantage over one of the most unpredictable elements—the weather.

The move signals a commitment by IBM to broaden its offerings as it focuses on new projects, especially after a year with rocky financials and a “disappointing” outlook for 2015.  The impact of this purchase is not likely to be seen directly by consumers in the near future.  At its core, IBM is a tech and consulting company with business to business as its bread and butter priorities.  This new acquisition can help businesses cope with the weather, one of their most expensive, uncontrollable variables to business costs.

Listed are different ways even a slight improvement in the accuracy and localization of weather predictions can help business:

  1. Insurance companies that can text policyholders on how to handle their assets, such as cars or homes, with impending disasters.  Hail damage alone costs insurance companies over 1 billion dollars a year.

  2. Retailers predicting boom or busts in markets based on weather, so they can purchase inventory

  3. Home builders scheduling work

  4. Self-driving cars programed with weather predictions to help the vehicles better prepare for what is ahead

IBM spokeswoman Laurie Friedman confirmed that IBM has big plans, similar to the list above, for using this acquisition of weather data as the core of a potentially decades-long growth strategy:

“With this acquisition, IBM is going to harness one of the largest big data opportunities in the world — weather.  Weather is probably the single largest swing factor in business performance — it impacts 1/3 of the world’s GDP and in the U.S. alone, weather is responsible for about half a trillion dollars in impact. Weather affects every aspect of the economy – energy usage, travel and transportation, new construction, agricultural yields, mall and restaurant traffic, etc.”

*Sarah Wesley Wheaton is in her second year at Wake Forest University School of Law. She holds a Bachelor of Arts from UNC-Chapel Hill in Communications with a concentration in New Media and minors in History and Cinema. A former app developer, she is interested in working with established and emerging businesses in corporate, technology and new media matters. She adores dogs, recently rescuing a seventy-five pound Golden Retriever/linebacker named Chewbacca.

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