IBM Buys Digital Assets of The Weather Company. How Does It Impact Indian Industry Of Weather Forecasting?

The fact that IBM will use The Weather Channel's business for use in its analytics' that are in turn used in critical processes, like saving aviation fuel by earmarking the most efficient route, is simply awesome. It also serves as an eye opener for businesses worldwide that run without factoring in weather into their efficiency endeavours. Monsanto's purchase of Climate Corporation for $1 billion in 2013 is the only other effort by a big corporation in making a backward linkage with weather.

But does this mean the home grown weather forecasting companies see an exit opportunity here? Less likely. Unlike e-commerce, this is a very niche market where it takes years to build a business and credibility. The technology and methods of forecasting varies and there is no one right method. Hence investors will not be sure which ship to board. But this deal will surely raise the interest level of various companies towards the weather forecasting industry and investments may flow in more frequently than ever. This creates a strong ground for the various private weather forecasting companies in India and helps them scale up the technology and market.

IBM's move has also fortified the fact that weather is one of the greatest big data opportunities of the century. Climate change and effectual changing weather patterns further necessitate significant investments and work on sifting through millions of data points generated around the world every day. Giants like GE, Accenture and et al. may soon see this opportunity and source weather data in a big way. Google Weather instead of weather powered by available sources.

The Indian weather market may also see a renewed vigour in consumer confidence. The biggest challenge the industry faces is trust. The fact that generations have gone without reliable weather forecast is becoming an issue for weather companies to market their solutions. The private market for weather may be young here but it is quite pragmatic. New concepts are being floated for energy efficiency, predicting dam discharge, flood and drought forecasting, predicting demand for consumer goods whose use varies with weather, etc.

The deal becomes a shot in the arm for the weather industry as it is a symbolic gesture to reinforce trust in weather data and forecasting as a solution to deal with problems like how many beers, soft drinks, ACs would sell this summer? Would my city be warmer or colder in the next few days? How much energy should I buy? And so on.

Any discussion on weather in the Indian context is incomplete without including the Indian farmer. He who bets his entire crop on the vagaries of weather to fill the nation's granaries. There are farming clusters that are rich, and are linked to some kind of weather information service and risk cover. But the majority is ignorant, suspicious and can't afford to buy such services and covers. There is a huge gap and an underlying opportunity for bellwether investments in the sector to make weather based services and risk covers comprehensive and inclusive. The thing to watch out for is how soon.