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The IoT is worth $3 billion to IBM. What's it worth to CIOs?

IBM bets $3 billion on a dedicated IoT business group, but CIOs might want to hedge their bets on an IoT partner, says one analyst. Also in Searchlight: Silicon Valley execs rally against anti-LGBT laws; GitHub gets blasted by denial-of-service attacks.

IBM announced this week that it's investing $3 billion in an IoT business unit over the course of four years. For CIOs, the news is a sign that it's time to figure out the potential value of the Internet of Things for their businesses.

IBM said it will focus its efforts on building a cloud-based, unified platform of industry-specific tools on which customers and partners can build IoT applications. The company also said it is partnering with The Weather Company, owner of The Weather Channel, to provide its customers with real-time weather data to use with IBM's analytics tools. The partnership is the latest addition to what IBM calls its "IoT ecosystem," which also includes Twitter, AT&T and ARM, a British computer architecture company.

Consolidating its disparate IoT resources into a unified platform certainly makes sense for IBM, said Al Velosa, research vice president at Gartner.

The IoT space is currently a "land grab" in which other heavyweights such as GE, Microsoft and Oracle are also ramping up their efforts, Velosa said. Additionally, small companies such as PTC, and even smaller ones like Arkessa, have also thrown their hats in the ring. "They're all trying to say, I'm the right solution for you, I understand this space, I can help you move along on this journey," Velosa said.

Companies with a clear idea of how they plan to incorporate the IoT into their business models may well decide that partnering with a nimble startup is the way to go, Velosa said, but he predicted many businesses will find IBM's big move into this area reassuring. The newness of IoT technology, the lack of standards to compare solutions with each other, concerns about security and privacy, and uncertainty about how businesses can actually use sensor data to make money will have some companies looking for established vendors, he said. "They want somebody they can trust will be here in a year to help them start this journey," he explained.

Contextualized data for decision making

Still, Velosa cautions that given the newness of IoT ecosystems, including IBM's, CIOs looking to pursue IoT initiatives should hedge their bets. "As [companies] are building up their proof-of-concept projects, they need to look at having these projects with two or three vendors," he advised.

Velosa did say that IBM's recent partnership with The Weather Company, in particular, is something CIOs should keep a close eye on. The alliance combines the mountains of data The Weather Company collects daily from about 100,000 weather stations, satellites, radars and sensors with IBM's analytics capabilities -- insight that could be used to make business processes more efficient. And for businesses, the insight you get from the Internet of Things is more important than the things, said Velosa.

"It's either about cost reduction or optimizing your business," he said, citing lowering energy costs as one use case for the IoT. Case in point: If you had specific information about your building, you could combine those data points with weather data, but instead of having to look up the weather yourself, the weather information could be built into your system so that you can more efficiently manage the temperature inside your building.

"This is actually a very important experiment for CIOs to look at, because you're combining contextualized information with the Internet of Things," he said.

CIO news roundup for week of March 30

Here are other headlines from the week as the holiday weekend approaches:

  • Technology leaders took a stand on the controversial religious freedom laws passed in Indiana and Arkansas and pending in other states. On April 1, 38 tech executives signed a joint statement calling for all 50 states to add anti-discrimination protections to their civil rights laws. And in a Washington Post op-ed, Apple CEO Tim Cook warned against the dangers of such laws.
  • Coding site GitHub was hit by a barrage of distributed denial-of-service attacks for five days. The company said on its blog that it believes that the attack, the largest it had ever encountered, was intended to "convince us to remove a specific class of content." Security experts are pointing to the Great Firewall of China as the perpetrator. 
  • You might soon be able to restock on paper towels with a touch of a button. Press a conveniently placed Wi-Fi enabled button, called Amazon Dash, and Amazon ships the item right to your doorstep. The gadgets are free and available to Prime customers (invite-only).
  • A new Android tool wants to help you know once and for all what your smartphone's apps are actually doing when you're not using them. The free version of the app, called SpyAware, tells you how risky your phone is overall, how much data was used and which apps were active while you were idle. Whether you should trust SpyAware itself with your data, however, is another matter entirely.

Check out our previous Searchlight roundups on Google's Wall Street CFO hire and Facebook Messenger's peer-to-peer tool.

Next Steps

Read Harvey Koeppel's tips for CIOs on how to prepare for the Internet of Things. Then, read more about The Weather Company's addition of IBM SoftLayer on SearchAWS.

Making sense of Internet of Things data

Dig Deeper on Internet of things (IoT) for business

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