IBM buys Weather Co.’s digital assets, data – USA TODAY
International Business Machines Corp. said Wednesday it has agreed toÂ acquireÂ the Weather Company’sÂ data and digital properties, a move to market and sellÂ cloud-basedÂ weather information along with software to business and government customers.
Financial terms weren’t disclosed. But the dealÂ is valued at more than $2 billion, said a person familiar with the matter.
It doesn’t include Weather’s primary TV asset, the Weather Channel. ButÂ IBM will own mobile and web assets, including weather.com, forecasting operation Weather Underground, the Weather Company brand andÂ Weather Services International, a Weather Channel division that sells software to business customers.
After the acquisition,Â the Weather Channel will license itsÂ forecast data and analytics, as well as the Weather Channel brand,Â Â from IBMÂ under a long-term contract.
In 2008, the Weather Co. was bought by anÂ investor group — led by Comcast’s NBCUniversal andÂ the private equity firms Bain Capital and the Blackstone Group — for about $3.5 billion. But reports have surfaced in recent months that the Atlanta-based company was looking to unload its digital business to focus on TV assets.
IBM and the Weather Co. are familiar with each other.Â Earlier this year, IBM, which is looking to broaden its software business in the “Internet of Things” sector, began working with Weather Services International to integrate WSIâs real-time weather information into its business applications. And the Weather Co., began moving its weather data — used by The Weather Channel –Â onto IBM’s cloud platform.Â The partnership was formedÂ to develop and sell weather analytics tools to local governments and businesses that seek to predict and plan for natural disasters and other weather-related events.
As the two companies began to work together, IBM’s acquisition just made sense. “WhenÂ we started to goÂ down the partnership path … (the companies discovered) synergistic new solutions that would be not only digitally disruptive but transformative from a business performance standpoint,â said Inhi Suh, Vice President, Strategy & Business Development, Analytics, IBM.
For example, power companies and other utilities need not only hourly and daily outage predictions along with up-to-the-minute reports but alsoÂ long-term forecasts into the next month or so, she said. âBeing able to use all of the advanced weather science that the Weather Company has developed and you marry that with IBMâs deep industry expertise in utilities and distribution and we can now do things like pre-storm logistics, (predict the need for) first responders in emergency situations and predict load forecasts for business,” Suh said.
The Weather Company’s systems create 4 gigabytes of weather-related data every second, saidÂ Cameron Clayton, the company’s president for product and technology.Â âWe got pretty good at predicting the future but this partnership really transforms our ability to help people make better decisions about that information,” he said.
The impact of weather on U.S. business amounts to about $500 billion annually, Clayton said. “Weather affects retail behavior, energy consumption,Â supply chain, transportation, government,Â financial markets,Â almost everything,” he said. “So the impact on business is tremendous.”
The Weather Channel will continue to be owned by the Weather Co.’s original owners,Â a consortium comprising the private equity firms The Blackstone Group and Bain Capital, and NBCUniversal.
The Weather Co.’s meteorologists analyze and store climate and weather data inÂ their “cloud” servers that distributeÂ real-time information toÂ its more than 500 clientsÂ in the media, aviation, energy, insurance and government industries.Â The Weather Co. says its digital properties drawÂ 82 million unique monthly visitors and itÂ hasÂ the fourth most visited mobile app in the U.S.
âThe Weather Companyâs extremely high-volume data platform” will allow IBM’s customers to “link their business and sensor data with weather and other pertinent information in real time,â said John Kelly, senior vice president of IBM Solutions Portfolio and Research, in a statement.
IBM said it also plans to further develop the Weather Co.’s digital advertising skillsÂ for more ad-sponsored content and applications.
The acquisition is expected to close in the first quarter of 2016.
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Mike Snider on Twitter: @MikeSnider.