Every year, extreme and unpredictable weather in the U.S. causes damage and disruption for people and businesses -- an estimated $485 billion annually, according to a 2011 American Meteorological Society estimate that is almost certainly higher today. Better data modeling and analytics, though, have the potential to improve forecasts and reduce some of those risks, which is why The Weather Company is teaming with IBM.
Announced Tuesday, the partnership will involve moving The Weather Company's data services platform to IBM's cloud and then integrating those services with IBM's. One key element of the collaboration will see IBM using its Watson Analytics to enable better decision-making by companies in especially weather-sensitive industries like insurance, utilities, retail and logistics. (Watson is the IBM cognitive computing system that famously beat human champions on the game show Jeopardy!)
Working together with IBM, The Weather Company -- including its WSI global business-to-business division -- will also enable developers and entrepreneurs to more easily build mobile and Web apps based on the latest weather data and analytics. Consultants with IBM's Global Business Services will also work with WSI to combine data from The Weather Company with other sources to develop new ways of addressing businesses' weather-related problems.
$1 Billion in Costs from Hail Alone
"Together, we'll help businesses and governments transform their decisions and operations around weather fluctuation at a scale that hasn't been possible until now," said David Kenny, chairman and CEO of The Weather Company, whose portfolio also includes The Weather Channel, weather.com and Weather Underground. "This is a watershed moment for businesses that have long been impacted by weather but haven't had the rich data or enhanced decision-making ability to drive positive business outcomes."
Hailstorms, for example, cost insurance companies in the U.S. more than $1 billion a year in claims for damage to vehicles. By combining WSI's Weather Alert service with IBM's analytics, insurers will be able to send their customers text messages to warn of coming storms with possible hail, giving people time to move their vehicles to safer locations. Such warnings could reduce insurance company costs by as much as $25 per policy-holder, a figure that could add up to millions of dollars a year.
Having a better gauge on the chances for extreme cold, such as was seen during the "polar vortex" that affected large swaths of the U.S. in January 2014, could also help food stores and other retailers make better staffing and supply-chain decisions, according to IBM and The Weather Company. Areas that saw temperatures plunge by more than 10 degrees Fahrenheit last year reported drops in retail sales of 15.5 percent, while stores in areas where temperatures didn't drop as much saw sales decline by only 2.9 percent.
'Real-Time Actionable Insight'
Better data, big data and analytics are making it increasingly possible for businesses to understand potential weather impacts as they happen, according to IBM.
"There's an opportunity to inform all business operations and decision-making with real-time actionable insight delivered securely via the cloud and extracted from all this data collected from sensors all over the planet," said Bob Picciano, senior vice president for IBM Analytics.
Weather data is now available from millions of sensors, aircraft, buildings, vehicles and smartphones across the U.S. WSI's system already uses such data to generate around 2.2 billion forecast points around the world and more than 10 billion forecasts a day on busy weather days. The Weather Company aims to expand those capabilities even more by migrating its system to IBM's cloud.
The Weather Company spokesman David Blumenthal told us his company and IBM have already started to develop and roll out new offerings such as the hail-alerting solution, and that more is coming, especially for businesses in industries like insurance, utilities and the government sector.
"We have identified a set of current customers within the industries mentioned above with which we'll be working initially," Blumenthal said. "We do believe this partnership will be a strong driver of new opportunities within these vertical markets to start, among others."
The Weather Company has until now built its services with Amazon Web Services, according to Blumenthal. However, he quoted CIO/CTO Bryson Koehler as saying: "I believe in the multi-cloud story and believe that any serious cloud-based business or application needs to be built in a cloud-agnostic way. TWC has been on that journey for the last three years, and that's what has enabled us to deploy our Data Services Platform onto IBM SoftLayer so we can power our business and strategic opportunities with IBM beyond what we could do with AWS alone."