IBM to invest US$3bn to establish new internet of things unit

31 Mar 2015

US technology giant IBM is to invest over US$3bn over the next four years to establish a new internet of things (IoT) unit that it envisages will be a US$40bn a year business by 2018.

In particular the company is aiming to capitalise on its pioneering work in Smarter Planet and Smarter Cities, creating practical IoT applications.

IBM CEO Ginny Rometty said the company will invest between US$3bn and US$4bn to boost sales from its new IoT business to over US$40bn over the next four years by combining sales from cloud, data analytics and bmobile into a cohesive unit that will spearhead the reinvention of IBM.

The new business unit will be led by Pat Toole as general manager.

Knowing how the world works – data is the new oil

“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, senior vice president, IBM Analytics.

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

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

To address this IBM is creating an IoT Cloud Open Platform for industries that will provide analytics on demand. For example IBM is designing a cloud-based service for insurance companies to extract insight from connected vehicles.

It is creating the IBM Bluemix IoT Zone that will fuse real-time data and embedded analytics with mission-critical IoT proceses.

IBM said it is also expanding its partner ecosystem of silicon and device manufacturers including AT&T and ARM.

Among the global IoT projects underway from Australia to Canada is work being done in Dublin between IBM and Dublin City Council to solve the root cause of traffic congestion.

IBM image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years