Wednesday, October 28, 2015

Internet of Thinking: Why IBM Bought The Weather Channel


Today’s sit-up-and-take-notice moment for me was IBM’s acquisition of The Weather Channel’s digital properties. We are having more and more of these unusual maneuvers occurring in the IT Services industry, and there are more to come as the industry reinvents itself.

I am a product of this industry. Genetically, it is an industry wired around the development and integration of systems. Dating back to the dawn of the computer age, companies such IBM have existed with the value proposition of being adept at automating processes via computing technologies (although few others have as deep a pedigree as IBM).

It’s an industry that ritualizes requirements-driven design and implementation of capabilities that meet specified “user” functions. 

One of the more instructive experiences in my career was a U.S. Defense Department program that I led to modernize the wholesale logistics (buying, storing, transporting, and delivering everything from boots to bullets) processes for all branches of the military. 

We had thousands of people working to synthesize the needs of the user community, rationalize legacy systems capabilities, model data sources and references, and write code to bring a new “standard system” to life.

This was the final government assignment in my career, as I was dismayed by the political unraveling that led to the cancellation of the program due to the lack of agreement among the military departments involved. Consensus is a tough way to drive innovation.  I moved on from this to the commercial services world - IT and Business Process outsourcing.

In the commercial services segment, I found much of the same: buyers and providers of IT Services tend to think in terms of requirements at the present moment. There’s less political consensus-taking, but decisions are still afflicted by thinking that is constrained by what’s comfortable and familiar.

IBM’s move to “use the data provided by The Weather Company's sensors to boost its analytics offerings for business clients” is remarkable for its progressive potential. I doubt that this is a strategy being driven by any specific client requirement.

Henry Ford observed, “If I'd asked customers what they wanted, they would have said ‘a faster horse’.” To be an innovator in your industry, you have to have a deeper understanding of the future than do your customers.

Ford’s observation is somewhat akin to a market leader understanding that its legacy business is fading fast and that it must make bets on new forms of value for the market of the future. 

By my reckoning, IBM’s strategy here is to create an “As A Service” suite of offerings that leverage the IoT assets of The Weather Channel. You can be assured that this isn’t the only such move, but merely a key component of a bigger ambition.

“As A Service” isn’t a requirements-driven approach where a service provider responds to a specific set of client needs. Rather, it’s a market-driven approach that reflects informed anticipation of the needs of multiple clients.  That’s the Internet of Thinking.

Peter Allen has many years of operating experience as a top executive and strategic advisor for companies of all shapes and sizes, with focus on technology-enabled business services. He is now a Boston-based Managing Director at Alvarez & Marsal.

Image: courtesy IBM via YouTube







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