As part of a new deal between the companies, The Weather Company will shift its massive weather data services platform to the IBM Cloud and integrate its data with IBM analytics and cloud services.
The deal reflects how competition in the cloud market is heating up too: The Weather Company is a close partner with Amazon Web Services (AWS) and Bryson Koehler, the CIO/CTO for The Weather Company, told ZDNet: "I believe in the multi-cloud story and believe that any serious cloud-based business or application needs to be built in a cloud-agnostic way."
The Weather Company, he said, "has been on that journey for the last three years and that's what has enabled us to deploy our Data Services Platform onto IBM SoftLayer so we can power our business and strategic opportunities with IBM beyond what we could do with AWS alone".
As IBM points out, weather is the single largest external variable in business performance - responsible for "an annual economic impact of nearly half a trillion dollars in the US alone".
But one of the big issues, according to IBM, is that while weather prediction is getting more precise and granular all the time - thanks to bigger and better computers and better software - business systems "generally assume every day is the same". The result is that knowledge of impending extreme weather disruptions "don't always trigger operational responses".
IBM and The Weather Company think the combination of traditional business data, such as weather information, and what the companies call the "unprecedented number of Internet of Things (IoT) enabled systems and devices" is going to transform enterprise decision-making in a fundamental way.
The IBM/The Weather Channel partnership is part of a $3 billion investment IBM is making in the IoT and cloud services as a whole, the company said in a statement.
A multitude of sensors
The combination of the IoT and cloud computing will enable more than 100,000 weather sensors and aircraft along will "millions of smartphones, buildings and even moving vehicles" to combine information. WSI, The Weather Company's parent, will process data from thousands of sources, the companies said, resulting in approximately 2.2 billion unique forecast points worldwide. The WSI "averages more than 10 billion forecasts a day on active weather days".By migrating its weather data platform to IBM Cloud, WSI hopes to be able to speed the growth of what is believes is "one of the largest cloud-based applications in the world".
IBM and WSI/The Weather Company will aims to deliver cloud services in three areas:
Watson Analytics for Weather: IBM and WSI aims to enable the integration of historical and real-time weather data in business operations and decision making with IBM analytics platforms such as Watson Analytics. The companies said they will jointly develop industry solutions for insurance, energy & utilities, retail and logistics.
Cloud and Mobile App Developer Tools: Entrepreneurs and software developers will be able to build mobile and web apps that use WSI data combined with data from operational systems, connected devices and sensors using advanced analytics through IBM's cloud application development platform, Bluemix.
Business and Operational Weather Expertise: Consultants from IBM Global Business Services will be trained to combine WSI data with other sources to help interpret "industry pain points", the companies said, and provide new insights to help solve business problems.
The aim is to combine IBM's cloud computing, consulting, and analytics experience with WSI's weather data and forecasts so that industries can hopefully have better weather prediction, the companies said.
Some of the examples IBM and and WSI use include:
Insurance: A simple weather issue like hail carries a fairly hefty cost. Insurers pay more than $1 billion in claims every year for vehicles damaged by hail but WSI's Weather Alert service, together with IBM Analytics, can help insurance providers by enabling them to send policyholders text messages that alert them to impending hailstorms - and safe locations - so vehicles can be moved before damage occurs. These insights have the potential to save insurers up to $25 per policyholder per year in hail-prone areas, which adds up to millions of dollars annually, IBM said in a statement.
Retail: Each winter, retailers in snowy areas see patterns in which storm forecasts drive spikes in sales of goods and tools such as groceries, shovels, sand, salt and cold-weather gear. At the same time as the retailers are laying out for extra sales, these same events typically hamper retail sales as consumers stay inside. The differences can be profound - during the January 2014 polar vortex in the US, areas with greater than 10°F/12.2C drops in temperature saw sales fall 15.5 percent while areas with a less than 10°F/12.2C drop saw sales fall only 2.9 percent. The ability to better understand and predict the impact of such weather events allows retailers to adjust staffing and supply chain strategies as needed - regionally and nationwide.
Utilities: Utility companies in the US feel the impact of an increase in temperature and relative humidity dramatically in air conditioning use and power consumption. The difference between 90 and 95 degrees in Texas, for example, can equate to $24 million more in electricity spending per day. With IBM and WSI, utilities should be able to more accurately predict power consumption so they can avoid overproducing power, reduce service interruptions and better serve customers, the companies said.
David Kenny, chairman and CEO of The Weather Company, claimed that the agreement between The Weather Company and IBM was, "a watershed moment for businesses that have long been impacted by weather but haven't had the rich data or enhanced decision-making ability to drive positive business outcomes".
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