IBM announced it will invest $3 billion over the next three years in setting up a new Internet of Things (IoT) unit, designed to gather and analyse data from online devices and create “solutions” targeted at enterprise customers.

Based on a cloud-based “open platform”, IBM said the new unit will build on work associated with its ‘Smarter Planet’ and ‘Smarter Cities’ initiatives, where practical applications were created through a mixture of IoT and big data analytics.

“Our knowledge of the world grows with every connected sensor and device, but too often we are not acting on it, even when we know we can ensure a better result,” said Bob Picciano, senior vice president, IBM Analytics.

“IBM will enable clients and industry partners apply IoT data to build solutions based on an open platform. This is a major focus of investment for IBM because it’s a rich and broad-based opportunity where innovation matters.”

IBM reckons that around 90 per cent of all data generated by devices, such as smartphones, tablets, connected vehicles and appliances, is never analysed or acted on. As much as 60 per cent of this data, adds IBM, begins to lose value within milliseconds of being generated.

To address this shortcoming, IBM announced a three-pronged approach, the first being its ‘IoT Cloud Open Platform for Industries’. This is designed to provide new analytics services that clients, partners and IBM will use to develop IoT solutions targeted at specific industry sectors. IBM gave the example of cloud-based service that helps insurance companies extract insight from connected vehicles.

The second area is IBM’s Bluemix platform-as-a-service, enabling “developers to easily integrate IoT data into cloud-based development and deployment of IoT apps”.

IBM’s ‘IoT Ecosystem’, the third element of the new IoT unit, is an expansion of Big Blue’s existing ecosystem of IoT partners, which includes AT&T, ARM and Semtech.

As part of the $3 billion IoT announcement, IBM revealed it was partnering with The Weather Company to build tools that help companies in the retail, insurance and utilities industries anticipate and prepare for bad weather.

IBM thinks companies can combine live weather forecasting with a range of business data, so they can quickly adapt to customer buying patterns or supply chain issues which are weather connected.