IBM Makes $3 Billion Bet on ‘Internet Of Things’ Market With Cloud Services Push

IBM is planning to invest a whopping $3 billion over the next four years on a new Internet of Things (IoT) division that will focus on the enterprise. In addition, IBM said it's building a cloud-based open platform designed to help clients and ecosystem partners build IoT solutions. The open platform will help its clients and partners integrate data from a wide range of IoT and traditional sources, ultimately allowing them to design and produce a whole new generation of connected devices that are better optimized for IoT.

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

By IBM's math, around 90 percent of all data generated by devices like smartphones, tablets, connected vehicles, and appliances never gets analyzed or acted on. And as much as 60 percent of that data starts to lose its value with milliseconds of being generated, IBM says.

IBM aims to change this by providing new analytic services through its open platform. An example the company gives is a cloud-based service that helps insurance companies pluck data from connected vehicles, which in turn will help enable more dynamic pricing models and customized services to individual drivers.

Some of these things are already in play. For example, IBM is using sophisticated tools and analytics to help the Southern Ontario Water Consortium in Canada to understand watershed dynamics, safeguard drinking water, and forecast the impact of growth. When the new platform rolls out, it will be capable of analyzing data collected every 15 minutes from 600 data points per hour from over 100 sensors.