IBM to Invest $3bn in Internet of Things Division

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IBM has announced that it is to invest $3 billion to build an Internet of Things (IoT) unit over the next four years to capitalize on the surge of real-time data.

The new division will aim to harness the data power of smartphones, tablets, connected vehicles and home appliances to enable clients and partners to build their own IoT products and solutions via a cloud-based, open platform.

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IBM estimates that 90% of all data generated by these devices is never analyzed or acted on, with as much as 60% of this data beginning to lose value within milliseconds of being generated.

"Our knowledge of the world grows with every connected sensor and device," says Bob Picciano, Senior Vice President of IBM Analytics, "but too often we are not acting on it, even when we know we can ensure a better result."

IBM also announced that it is to team up with the Weather Company to create data applications and forecasts to assist businesses in the insurance world with policyholder alerts and responding faster to claims, and retailers with buying patterns and logistics.

Commenting on the deal, David Kenny, Chief Executive of Weather Company, said: "This deal combines the capabilities of the world's largest and most advanced commercial weather company with the leader in big data and analytics."

IBM has positioned the new IoT division as an extension of its Smarter Planet initiative and IBM’s System z General Manager, Pat Toole, has become the General Manager of the new IoT unit.

The vendor is also expanding its ecosystem of IoT partners, which includes industry-oriented solution providers, such as AT&T, ARM and Semtech.

The news comes, five weeks after the computing giant announced at its annual investor meeting that it was targeting $40 billion in annual revenue from the cloud, big data, security and other growth areas by 2018.

IBM had stated the $40 billion would come from "strategic imperatives", namely cloud, analytics, mobile, social and security software.