IBM Investing $3B in Internet of Things

IBM will invest $3 billion over four years to establish an Internet of Things (IoT) unit, whose first task is to build a cloud-based open platform.

The industry-specific cloud data services and developer tools will will be available for manufacturers to design and produce new connected devices.

"Our knowledge of the world grows with every connected sensor and device, but too often we are not acting on it, even when we know we can ensure a better result," Bob Picciano, senior vice president of IBM Analytics, said in a statement.

According to the company, 90 percent of data generated by smartphones, tablets, and connected vehicles and appliances is never analyzed. What's worse: As much as 60 percent of that information loses value within milliseconds of being generated.

In an effort to combat this problem, IBM will offer IoT Cloud Open Platform for Industries, IBM Bluemix IoT Zone, and IoT Ecosystem.

"IBM will enable clients and industry partners [to] apply IoT data to build solutions based on an open platform," Picciano said. "This is a major focus of investment for IBM because it's a rich and broad-based opportunity where innovation matters."

IBM's industry-focused platform will provide new analytics services for use in the design and delivery of Internet of Things solutions.

For instance, a cloud-based feature could help insurance companies extract insight from connected cars. Armed with that data, organizations can ensure more dynamic pricing models, and highly customized services tailored to individual drivers.

Using IBM's Bluemix platform-as-a-service, developers can enrich existing applications—enterprise asset management, facilities management, software engineering design tools—by adding real-time data and embedding analytics.

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These changes means an expansion of IBM's IoT Ecosystem, which includes partners like AT&T, ARM, Semtech, and the newly announced The Weather Company. Together, IBM and The Weather Company will help businesses utilize their impressive library of data to improve operational performance and decision-making.

"This deal combines the capabilities of the world's largest and most advanced commercial weather company with the leader in big data and analytics," The Weather Company CEO David Kenny said in a statement. "Together, we'll help businesses and governments transform their decisions and operations around weather fluctuation at a scale that hasn't been possible until now."

Picciano agreed, adding that the new partnership "can be a catalyst to making critical business systems even smarter."

IBM is also working to make cities smarter, via strategies for collecting, sharing, analyzing, and acting on data. Solutions include updated buildings, public safety, transportation, and water systems.