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A Borscht Belt comedian could find some good material in IBM's planned purchase of The Weather Co.'s data processing and analytics operations: "What, do they think they're buying a cloud company?" (Bada-boom!) But in truth, the deal looks like an important step in the evolution of the burgeoning IBM big data analytics strategy. And it may be a classic example of the bellwether technology event that can be viewed from dual perspectives. In this case, those are data and analytics.
What we know is that, without naming the price it's paying, IBM in late October announced a definitive agreement to acquire the bulk of The Weather Co.'s digital and data assets, excluding its broadcasting operations, which will continue to rely on TWC forecast data and analytics. Pending regulatory approvals, the deal is expected to close in 2016. The die for the acquisition may have been cast earlier this year when a technology agreement saw TWC pledge to move its weather data services platform to the IBM cloud.
Importantly, that agreement called for TWC to integrate its data with IBM analytics and cloud services. This was seen as a means to feed the data needs of IBM's Watson cognitive platform. We can expect more of the same now. And, truly, beyond Watson, data on climate and weather is just the type of information that companies in retail, agriculture and other industries are keen to feed into a mix of their own reports and projections.
Weather forecasts, data predictions
"Weather data is critical to many different fields of interest, not just forecasting the weather," said Craig Mullins, a data management consultant, author and SearchDataManagement contributor.
Mullins points out that weather affects logistics for delivery and transportation systems. It can also affect various types of service delivery organizations, as well as impact satellite transmissions for GPS positioning and broadcast signals. In his estimation, such information will enable IBM to place greater intelligence into its analytics systems and tools. And Mullins thinks IBM and others may follow up with further acquisitions of data-producing and data-gathering companies.
The forecast for TWC's data platform within IBM will vary across product offerings, meaning different things to different IBM big data analytics efforts, according to Adrian Bowles, founder of market research and analysis company Storm Insights Inc.
"It's useful to the Watson effort because it provides some of the most meaningful data for making business decisions," he said. "The same is true for IBM's Internet of Things effort, which is already working with TWC."
A weather eye on big data analytics
A precursor to this purchase was agricultural products maker Monsanto's 2013 acquisition of the Climate Corp., which analyzes weather data to predict growing conditions for farmers. With a price tag of $932 million, that buy was a bit under the $1 billion magic number, but it was enough to send a signal that big data analytics was a potential industry game changer.
Using available data, the Climate Corp. came up with actuarial tables meant to foretell the type of insurance that a farm operation could use to hedge against crop risks. That same information also told farmers a lot about what to plant and where, when, and how to do it. With the purchase, Monsanto went from selling seeds to selling seeds and analytics on how to use them more effectively.
IBM's purchase of The Weather Co. is about the weather data, sure. But the deal is also just as much about predictive analytics and Machine learning. As with the Climate Corp., much of the data on weather that TWC collects and analyzes is out there for everyone to see. Much of it comes from the U.S. government, also known as ''your tax dollars at work.''
But what TWC has learned to do with such data, while also supplementing it in innovative ways, is its special sauce. That includes creating the analytical programs and models that the data is fed into. Just as crucially, it has created an empathetic work environment for the people who oversee the predictions. So,
Get ready for 'Uberization'
David Kenny, chairman and CEO of TWC, was on stage during the opening general session at IBM's recent Insight 2015 conference in Las Vegas. The news of the deal with IBM would come later in the week. TWC and other meteorological organizations had just come off a pretty impressive series of predictions related to Hurricane Patricia, the biggest Pacific hurricane ever recorded. What 10 years ago would have been a very wide-area prediction was narrowed down significantly -- helping to save lives. Improving accuracy of predictions is a relentless goal, Kenny said in an interview after the session.
"We get data on what happened and we constantly improve our algorithms," he said. "We can gain precision month over month, quarter over quarter." And such iterative improvement is a key to machine learning and artificial intelligence, he added. "The common theme is the computer being able to infer to learn to get wiser over time."
Just such a dynamic is behind some of the closely watched companies of the day. Include data-and analytics-driven companies like Google, AirBnB and Uber in that group.
People in traditional companies would do well to consider "how to 'Uberize' themselves," Kenny said, echoing an Insight 2015 mantra. For many data management professionals, the need to start that process is already here. And while predictive weather analytics may appear to be a unique case, IBM's purchase of TWC points to a general trend with the potential to disrupt many fields of endeavor as data and analytics become more and more crucial to business success. And that's definitely no joke.
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You'll want to learn more about Watson, I presume