Cheaper car insurance and working around the weather: how IBM is using data in its new £2 billion Internet Of Things unit

IBM is spending billions on a new unit that will help companies use their data more effectively

The new IBM unit will use weather forecasting and other data from moving vehicles that will allow it to offer better pricing and deliver services customised to each driver. (Matt Cardy/Getty Images)

IBM, the computer giant, is taking a punt on the Internet of Things by investing over £2 billion ($3 billion) over the next four years on a new unit. The Internet of Things Unit is building a cloud-based platform that companies can use to get and contribute data that could affect their business operations.

IBM previously set up systems that used data to reduce crime, lower risks for firefighters and monitor water conditions.

Its new unit will go further, using weather forecasting and other data from moving vehicles that will allow it to offer better pricing and deliver services customised to each driver.

Timing is key, according Bob Picciano, senior vice president of IBM Analytics. IBM estimates that 90 per cent of all data generated by devices like smartphones, tablets, connected vehicles and appliances is never analysed or used. As much as 60 per cent of that data loses its value almost immediately after it is created.

The new IBM department will attempt to address this by helping companies connect to the cloud and use the data available.

The internet of things - a catchall term for devices that are hooked up to the internet - is being pushed by many quarters. Not least, the UK government, which included £40 million for developing the internet of things in the Budget announcement.