UPDATED 11:47 EDT / OCTOBER 28 2015

NEWS

IBM to buy Weather Company, launch IoT Watson business unit

IBM is getting into the weather forecasting business and, at least for the short term, becoming a big customer of Amazon Web Services.

In a $2 billion deal that grew out of a partnership announced this summer, IBM said it will acquire The Weather Company’s business-to-business, mobile and cloud-based web properties, including WSI, weather.com, Weather Underground and The Weather Company brand, and roll it into a new Internet of Things (IoT)-focused business unit based on its Watson analytics platform.

IBM didn’t buy The Weather Channel TV channel but said it will license weather forecast data and analytics under a long-term contract. Weather Company CEO David Kenny (above), who formerly ran content delivery network Akamai Technologies Inc., will join IBM.

Weather Company is the definitive big data and Internet of Things play. It monitors 3 billion weather forecast reference points, more than 40 million smartphones and 50,000 airplane flights per day, crunching that data and feeding it back to a variety of clients in the media, aviation, energy, insurance and government industries. If you own a smart phone, Weather Company grabs data from it.

The company’s business model is based on advertising and sales of weather data to a wide variety of industries. Shortly before today’s announcement, IBM trumpeted its partnership with the company at this week’s Insight 2015 conference in Las Vegas, saying analytics derived from weather analysis has brought applications across many vertical industries.

The deal gives IBM a high profile presence in a market that’s familiar to consumers as well as businesses. IBM said the Weather Company’s mobile and Web properties handle seven times the volume of Google and serve 82 million unique monthly visitors. Its mobile app is the fourth most popular on both Apple and Android platforms.

The deal also makes IBM a large customer of Amazon Web Services (AWS), which could be awkward in the short-term. In an interview at IBM Insight 2015 with David Vellante and Paul Gillin, cohosts of theCUBE from the SiliconANGLE Media team (below), Weather Company CEO Kenny said the company has spent much of the last four years moving its processing operations from dedicated infrastructure to cloud service providers. While The Weather Company announced plans earlier this year to shift the data services platform that powers its B2B division to the IBM Cloud, Kenny said AWS currently gets a bigger piece of the business. .

Kenny said the Weather Company has developed proprietary technology to enable it to shuttle operations quickly between different cloud service providers. IBM will presumably put that capability to work as it shifts processing loads to its own cloud platforms, probably before the deal’s anticipated close in the first quarter of 2016.


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