IBM Buys The Weather Company. Why?

This past week IBM announced that it was going to pay over $2B for the digital assets of The Weather Company. That means everything but the TV channel because who buys into the last millennium media when you can have something relevant? I am surprised how little buzz there is about this deal. It’s not like IBM didn’t promote it. The news was the lead keynote on Wednesday at IBM’s Insight conference and there was the usual press and analyst blitz. It’s not like they were trying to hide it.

My assumption is that the real impact of this acquisition hasn’t sunk in yet. It also doesn’t help that IBM is masking the real and incredible value this acquisition has for IBM by talking mostly about the Internet of Things and analytics. It’s true that these assets will have a major impact on the type of analysis a business can perform. IBM is correct that weather affects many types of business decisions. They are also acquiring some interesting ad placement and data gathering technology. None of that is worth what they paid for The Weather Company’s digital business or that couldn’t have been obtained in a different manner such as licensing.

The real impact will be the emergence of IBM as data merchants who can deliver valuable streams of unique data, along with the tools to analyze it, as a compute solution. The agreements with Twitter and Box all point in this direction. Twitter is a rich trove of streaming social media data and Box allows IBM to tap into unstructured corporate data. While they won’t be reselling the latter, they will be enhancing it with other data they sell and analyzing it as part of a solution. I wouldn’t be surprised to hear about IBM licensing or acquiring other types of textual and numerical data streams such as demographics, stock data, legal references, or scientific journals in the near future.

What IBM can do that few other companies can do is sell vertical industry solutions that combine their own and licensed data with customer data and the tools to process and analyze it. Let’s say there is an oil company deciding where to dig a new well. IBM has the capacity to help craft a selection analysis solution that looks at the weather related costs for drilling and maintaining a facility, social media signals that show political resistance to the well, and geo-spatial information combined with company geological surveys – all filtered through a cognitive computing lens – that helps find the best site for the project. It’s hard to find any other company that can provide a package that includes so many important elements for this type of analysis.

IBM’s acquisition of The Weather Company’s digital assets signals a recognition of the importance that contextual data has to technology solutions delivery. In a way, it’s the ancient computer science argument about garbage in-garbage out. With this acquisition, IBM is helping to insure less garbage going into critical analysis. More so, it is a recognition of the value of data in of itself. Technology can be had from a number of companies including IBM. Data is like a beautiful, precious gem – something unique, rare, and valuable that enhances everything around it.

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  1. […] For more thoughts on the IBM acquisition of The Weather Company, see Tom Petrocelli’s Blog. […]