Early Stage of IBM Recovery as It Signs Weather Channel

The deal stands out as an oddly modest one, compared to another IBM announcement. One of the world’s largest tech companies also will launch a suite of cloud-based products to help businesses with their needs to access and take advantage of connected devices. This decision may be part of the puzzle as IBM maps a recovery.

Investors seem to think IBM’s emerging plans are worthwhile. Its stock, a notorious underperformer, has done slightly better than the S&P 500 over the past month, which is a start.

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IBM management announced:

[I]t will invest $3 billion over the next four years to establish a new Internet of Things (IoT) unit, and that it is building a cloud-based open platform designed to help clients and ecosystem partners build IoT solutions.

IBM’s pioneering work in Smarter Planet and Smarter Cities was based on practical applications of IoT in the enterprise and led to a broad set of solutions, ranging from water management to optimizing retail and customer loyalty to alleviating traffic congestion. IBM leads in enterprise IoT implementations that securely combine and analyze data from a wide variety of sources.

With new industry-specific cloud data services and developer tools, IBM will build on that expertise to help clients and partners integrate data from an unprecedented number of IoT and traditional sources. These resources will be made available on an open platform to provide manufacturers with the ability to design and produce a new generation of connected devices that are better optimized for the IoT, and to help business leaders across industries create systems that better fuse enterprise and IoT data to inform decision-making.

For the time being, the move is mainly supported by a press release. However, the action behind the release is pointed in the right direction.

While IBM has armies of competition in the cloud, its new products are aimed at an essential part of the market. Connected device data collection has lagged much of the balance of data collection, according to IBM. It has some strong evidence to support its contention:

IBM estimates that 90 percent of all data generated by devices such as smartphones, tablets, connected vehicles and appliances is never analyzed or acted on. As much as 60 percent of this data begins to lose value within milliseconds of being generated.

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Given that much of the world, both business and personal, spends much of the day and night on these portable devices, a sorting of what all these people are up to has an almost certain advantage to enterprises that need to track them. The world has gone wireless, but no one seems to be tracking the details of its use terribly well. If IBM is correct, is has started to address the needs of a huge sector.