IBM, Weather Channel team for better business forecasts
IBM and the Weather Channel's parent company are collaborating on a true cloud data service.
The computing powerhouse and WSI, the Weather Company's global business division, have teamed up to integrate real-time weather information into business applications for improved performance and decreased loss of productivity due to weather.
With better weather data, insurance companies could alert policyholders via text message about impending hailstorms, for which vehicle damage claims total more than $2 billion annually, and direct them to safe areas.
Retailers could more smartly order supplies — salt, shovels or food, for instance — and adjust staffing during weather events. Pinpointing regions that might be hit the hardest by a weather event can affect the bottom line. Areas hit with temperature drops of more than 10 degrees during the January 2014 polar vortex saw sales fall 15.5%, while those with declines of less than 10 degrees saw sales drop less than 3%.
Utility companies could more accurately predict power consumption to reduce service interruptions. The difference between a 90-degree day and a 95-degree day in Texas, for example, can result in a daily increase of $24 million in electricity spending.
Better access to more accurate weather information could affect all types of businesses, helping save billions and adding to the U.S. economy. "When you think about most business processes, businesses treat every day as the same day, weather-wise," said IBM Senior Vice President Bob Picciano. "Many businesses could derive these competitive advantages."
Weather is perhaps the largest external factor in business performance, according to the University Corporation for Atmospheric Research. Weather conditions cost U.S. businesses about half a trillion dollars annually, the American Meteorological Society estimates.
WSI has already been fine-tuning its weather data. Similarly to how Google has mapped the Earth, the company WSI maps the atmosphere and can deliver more than 26 billion forecasts daily.
WSI currently supplies airlines with improved weather models and forecasts, updated every 15 minutes, so that pilots get real-time data. That allows pilots to avoid turbulence, reducing that by 70% for the average commercial flight. "That's not only more pleasant for passengers but reduces wear and tear (on aircraft)," said WSI CEO David Kenny.
Other industries learned about the improved data and looked to WSI to build systems for them to integrate it. "We don't have that capacity," Kenny said.
The integration of WSI's weather data into IBM's cloud services will let more businesses make use of improved forecasts for better planning, he said.
IBM Global Business Services consultants will be trained to interpret the data for clients. The new cloud weather information will be available to users of IBM's Watson Analytics and Bluemix cloud app development platforms.
"People creating the next apps to serve businesses and business clients will be able to think more organically about including weather intelligence into their apps," Picciano said.
And the data will only get better over time as sensors in smartphones, vehicles and other smart devices — the advance of the Internet of Things — send data to the system. "This will take the weather excuses out of business," Picciano said.
Follow Mike Snider on Twitter: @MikeSnider