New research from Strategy Analytics offers some insight about IBM's significant investment in the Internet of Things (IoT).

The report by Laura DiDio, IBM Takes Aim at IoT with Multi Billions Investment, looks at IBM’s IoT interests and how it's shaping its business to manage the IoT's growth.

In March, IBM set up its specialized IoT unit under the hood of its wider analytics business. It announced it would pump $3 billion into the unit and hire 2,000 workers to build out the business. But that's only the beginning, DiDo and Andrew Brown, Strategy Analytics executive director of IoT and mobility, told CMSWire.

Building a Cloud Platform

In the past 18 to 24 months, IBM has invested $10 billion in IoT and analytics, acquisitions and partnerships, DiDio said. It's also investing 6 percent annually on IoT research and development, she added.

IBM's objective is to build an open cloud platform that will enable everyone in the IoT ecosystem build solutions "with IBMs fingerprints all over them," she explained.

IBM is focused on building a foundation for IoT development.

“The real money in IoT is services. What will happen, for example, with with all those IT departments that are looking at moving to the IoT? If they are doing a large IoT deployment and not just doing something that's targeted in one small department and installing sensors, that's going to take a huge effort," DiDio said.

“The IoT is an amalgamation of many technologies. All of a sudden you have to put the data side of the house together with the telco and the carrier side, security, connectivity, software, analytics. It’s quite daunting. This is where IBM sees it role.”

4-Pronged Attack

The centerpiece of IBM’s IoT initiative is the IoT Business Unit, which works closely with it analytics group. IoT technology depends on analytics to process the data generated by connected devices.

IBM is in a good position to become an IoT market leader, Brown said, based on its traditional leadership in semiconductors, server hardware, databases, analytics and services.

"Additionally, IBM is a top tier player in emerging markets including cloud computing, big data and predictive analytics and IoT not to mention over 750,000 patents,” he added.

Big Blue is also enhancing the security, reliability, management,  mobility, connectivity and analytics features of its core server hardware platforms that enable the IoT such as the Power Systems and  System z Enterprise mainframes. The company has just come out with the z13 mainframe, which has an entry level price is the $50,000 to $75,000 range. "That puts in reach of even small companies,” DiDio said.

IBM's four-pronged IoT strategy includes:

  • Devices and Networks: Technology for hardware, networking, and operating systems infrastructure
  • Platforms: Technology to build and manage IoT systems along with programming APIs for software development
  • Applications and Solutions: Security and services for specific IoT solutions to mask complexity and reduce risk to organizations and individuals
  • Industry Specific Transformations: Packaged offerings like strategic consulting and business process change

IoT Financial Support

Brown said any company that wants to secure and maintain a future leadership role in the IoT will have to have deep pockets and solid financials.

“This is particularly true since IBM competitors like Cisco, Intel, Microsoft, Oracle, SAP and SAS all have IoT strategies. IBM will face competition from newer, non-traditional rivals as Amazon and Google as well,” he said.

Cisco, Google and Oracle are also aggressively purchasing IoT start-ups and established vendors in related IoT market segments like software, analytics and security.

Cisco, like IBM, is establishing Innovation Centers around the globe. Most recently Cisco opened its eighth Innovation Centre in Melbourne, Australia. So IBM cannot rest on its laurels.

But IBM’s past investments in data management, information management, cloud computing, analytics and hardware have put it in a very strong position.

“IBM has amassed all of the right ingredients for success: dedication and commitment in terms of manpower, monetary investment, a well-developed partner ecosystem and R&D center that spans the globe,” Brown said.

From this, System Analytics concludes that IBM is likely to be a strong force in driving mainstream adoption of IoT environments.

“IBM has an aggressive IoT and Big Data Analytics product roadmap. To date, it has done an excellent job of executing against its deliverables,” he said.