With Weather Co. Acquisition, IBM Bolsters Data Services, But It’s Not Diving Into Media Just Yet

ibm weatherIBM’s agreement to acquire The Weather Company’s B2B, mobile and cloud-based web properties – including WSI, weather.com, Weather Underground and The Weather Company brand, but not The Weather Channel – is likely more about data assets and less about a grand entrance into the media world. Read the release.

IBM was mum on its long-term strategy, saying through a spokesperson that “it’s still premature to discuss the advertising strategy since we just announced the acquisition and it has not yet been closed.”

Martin Kihn, research director at Gartner, doubts the expected acquisition signals IBM shifting into media.

“IBM hasn’t shown much interest in getting into media except via partnerships with DSP’s like MediaMath,” he said. “I’d anticipate they make weather data available via their data exchange and external data exchanges like Oracle Data Cloud. They might acquire a DSP, but for now I think they’re exploring the data lane of ad tech.”

If the Weather Company acquisition goes through, however, it will likely impact the ad tech market in other ways. Kihn pointed to the unique data set the Weather Company has developed, which would be expensive and difficult for another company to replicate so late in the game.

In a statement, John Kelly, SVP of IBM Solutions Portfolio and Research, noted the Weather Company’s data is useful for IBM clients relying on sensor data and that want to tap into the Internet of Things.

“While it might seem almost trivial, weather is in fact a very useful data point for all kinds of businesses – not least in ad tech,” said Kihn. “As media targeting gets more local and in-the-moment, weather will be even more important for targeting and dynamic creative.”

Ray Wang, principal analyst and founder of Constellation Research, agreed, saying the likely acquisition is primarily a means for IBM to bolster its data offerings.

“What this does is allow them to take the insights from the data and invest in value added data services and augmentation,” said Wang. “Think benchmarks, market place and new remixed data.”

Since weather is important contextual information, impacting sales forecasts and earnings, it affects markets and individual decision-making, just like data about location and time.

“This is part of [IBM’s] overall transformation from software to insights,” said Wang, explaining that this continues the tech giant’s efforts over the past three years to partner with or acquire data sources. “IBM will eventually emerge to be more of a network economy.”

That network economy will consist of three components, in Wang’s view: content, including product, services, experiences and insights; the network itself, including distribution channels and P2P delivery; and technology. As it acquires more data sources, the company is better able to deliver more context-driven insight.

“The goal here is to deliver on augmented humanity, which allows humans to make better decisions,” said Wang. “IBM wants to broker the data sources, benchmark the information, create new insights and products with the data sources.”

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