IBM Commits $3 Billion to New Internet of Things Business, Cloud-based Platform

IBM (IBM) said it will commit $3 billion over four years to set up an Internet of Things (IoT) business unit, betting it can establish a cloud-based, open platform to deliver a variety of services to harness and analyze data flowing from billions of connected devices.

The vendor positioned the IoT unit as an extension of its existing Smarter Planet initiative, pointing out that those engagements have been based on “practical applications of IoT in the enterprise,” leveraging analytics to produce solutions ranging from water management to optimized retail and traffic congestion relief.

IBM said critical to the effort is an expanded IoT partner ecosystem, including silicon and device manufacturers and industry-oriented solution providers, to deliver data services and solutions on IBM’s open platform.

IBM veteran Pat Toole, the vendor’s System z general manager, will serve as the new IoT unit’s general manager.

With new industry-specific cloud data services and developer tools in tow, IBM said it will add to its Smarter Planet experience to help customers and partners use data generated from IoT and traditional sources. Central to the plan is the cloud-based, open IoT platform the vendor has pledged to build for manufacturers to design and construct new, IoT optimized devices.

Steve Hamm, IBM Chief Storyteller, said the vendor expects some 2,000 IBM researchers, software developers and consultants will work on its IoT initiatives.

“For IBM, this isn’t about hype,” Hamm wrote in a blog post. “It’s about real accomplishments and real opportunities,” he said.

“We have completed thousands of Smarter Planet engagements with clients already, everything from smart grids to smart urban command centers to smart water management. And, today, we’re announcing a new business unit to broaden our reach,” Hamm said. “We’ll spend $3 billion over the next four years to develop and install IoT-based computer systems worldwide. More than 2,000 IBM researchers, software developers and consultants will be dedicated to delivering real-time insights delivered via the cloud to business and government clients,” he said.

IBM figures that up to 90 percent of all data generated by devices such as smartphones, tablets, connected vehicles and appliances is simply left on the table unused, with as much as 60 percent of that data shedding value “within milliseconds” of its generation.

“Our knowledge of the world grows with every connected sensor and device, but too often we are not acting on it, even when we know we can ensure a better result,” said Bob Picciano, IBM Analytics senior vice president.

“IBM will enable clients and industry partners apply IoT data to build solutions based on an open platform,” he said. “This is a major focus of investment for IBM because it’s a rich and broad-based opportunity where innovation matters.”

IBM said its IoT unit will include:

“Our new business unit pulls together technology and expertise that was previously scattered throughout IBM,” Hamm said.