IBM IoT China Summit 2015

On June 11, IBM hosted its second country IoT Summit as a global rollout in China and this is the very first of its kind outside of U.S. IBM spokesperson highlighted this as the pitch to China market when opening the Summit. The China Summit was packed with local partners and local IoT initiatives.

IBM China announced partnership with China Mobile IoT Company to work on connected cars along with another local IoT equipment and sensor provider, Shanghai HangSheng Auto Electronics. Another partnership was announced between IBM China and Beijing Richway Company for local water management. The project with a local LNGTOP Tech company on IoT for LNG (liquefied natural gas) energy network was packaged into the China Summit as well. With the recent announcement of The Weather Company through WSI, its B2B division, IBM actually is attacking unconventional data sets for the first wave of market exploration. So, what’s IBM doing?

IBM pledged 3 billion U.S. dollars to this new initiative plus a solution combo to help kick-start IoT projects should customers want to leverage such technology into business operation.

At the end of this March, IBM announced a new business division dedicating to Internet of Things (IoT) business. IBM thinks the IoT could drive unprecedented insights into business with the right analysis on data harvested from base infrastructure. And the insights would enable actions with better judgement than before.

During the IoT Summit, the Director of IBM Research China, Xiaowei Shen, delivered a speech on IoT 3.0 which is a vision for the road ahead. Shen differentiated the IoT 3.0 with heavy data analysis as compared to IoT 2.0 which has been identified with software infrastructure building. The IoT 3.0 moves solution from on-premise to the cloud.

Data analysis will be conducted to generate real-time insight so as to provide actionable insight for business operation and in doing so, it’s very important to run data analysis on the edge as well. Edge computing, as IBM called it, is not a new idea. Last year, Cisco promoted the idea of Fog Computing which shares the similar idea to have real-time data analysis on the mobile device, on-premise server, or nearby computing equipment rather than sending the data back to cloud for data crunch. As IBM pointed it out that 60% of data generated from device will lose its value within the first several seconds if not processed immediately.

In general, the definition of IoT 3.0 itself reveals the business that IBM is actually eyeing at, data analysis. As of now, it looks like IBM is using IoT as a business development tool to dig deep into business world and crack open new opportunities with data analysis following suit to generate continuous revenue. Data analysis is not like manufacturing business. For manufacturing business, a product can be sold for once and generate just one time sale.

However, for data analysis, it can generate repeated sales since once companies rely on data analysis for business operation so that they have to use data analysis service almost every day. That’s why GE is promoting engine data analysis service for engine maintenance and optimization since GE can sell only limited engines every year but the data analysis for engine management would be wanted all year long.

IBM will work with IoT sensor and equipment providers on the hardware layer of IoT. For Cloud and Data Analysis that’s where IBM comes in. The data analysis capabilities that IBM accumulated over the years include two legions. The front legion include the 30+ companies IBM acquired over the years pouring in 25 billion U.S. dollars each with different specialties, such as Cognos, SPSS, ILOG and Algo, to name a few. The combination of these companies’ skills enable IBM a very strong portfolio of business data analysis or business intelligence. The second legion is powered by Watson.

Watson is a cognitive computing system based on the Deep Blue which IBM built in 1990s defeating the then world chess champion. Watson is built to process big data with Deep Q&A capability or the so-called artificial intelligence. Although rooted in lab environment and initially targeted for academic purpose, Watson demonstrates strong commercial value for human society and business world as well. IBM has formed a Watson Business Group since January of 2014 hoping to garner the capability of Watson to fuel its next generation of business. However, it would take years to convert Watson’s capability for commercial usage.

So, this is IBM’s plan. Jumping on the global IoT enthusiasm, IBM now is planting ideas of data analysis while countries are busy wedging sensors into the public and commercial infrastructure to pave the way for data collection. Soon after the data centers are jammed with data, that’s IBM’s happy time.

Business leaders will cry for IBM’s data crunching machine since the data centers simply can’t hold massive meaningless data for long. Taken the WSI’s forecasting system as an example, now it offers approximately 2.2 billion unique forecast points worldwide, and averages more than 10 billion forecasts a day on active weather days, according to IBM. And the data are collected from more than 100,000 weather sensors and aircraft, millions of smartphones, buildings and even moving vehicles.

Other may see the data deluge as disaster, while IBM gladly to turn it into business opportunities. The rest will need IBM to revamp its organization structure, repackage solutions and sales pitch, and train new army of consultants to make sale and deliver. Most important of all, IBM needs to change its culture and mindset since this is a fast changing world allowing little room for slow action.

IBM needs to seize every possible opportunity to make a sale instead of a systematic approach like in the PC time. Now, IBM is running against time to turning its assets into revenue and market confidence.

(The article is published and edited with authorization from the author @吴宁川  from TMTpost, please note source and hyperlink when reproduce.)