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IBM invests $200 million in Watson IoT AI business

IBM invests $200 million in Watson IoT AI business

Citing escalating demand from customers looking to transform their operations with Internet of Things and artificial intelligence technologies, IBM makes a $200 million investment in the IBM Watson IoT global headquarters in Munich.

The venerable 105-year-old IBM may be a global company, but while it has operated important labs and offices overseas, its business units have always been headquartered in the U.S.

Until December of last year, that is, when it opened the new global headquarters for the IBM Watson Internet of Things (IoT) unit in Munich, Germany.

Now, faced with dramatically increasing global demand for Watson IoT solutions and services, Big Blue is doubling down on that investment.

On Tuesday, IBM announced a $200 million investment in the Watson IoT headquarters, marking one of the company's largest investments in Europe in its history.

The investment is part of the $3 billion IBM has earmarked to bring Watson cognitive computing to IoT. IBM says the move is a response to escalating demand from customers who are looking to transform their operations using a combination of IoT and artificial intelligence technologies.

IoT growth requires global focus

"IoT simply became too big to not have a focus," explains Bret Greenstein, vice president, IBM Watson Internet of Things, IBM. "We began with a business unit last year, specifically for IoT. It was a really good start. It gave us focus."

"We're changing our center of gravity a bit," Greenstein adds. "It's important for us to get the global focus. This is the first time we ever put a global headquarters for IBM outside of the [U.S.]. It's a really big move for us."

To underscore that point, eight months ago, IBM had 4,000 clients globally who were tapping Watson IoT solutions and services. Today, IBM says the number has grown to 6,000 clients.

IBM says the new investment will make Watson IoT headquarters the home of the first ever cognitive IoT Collaboratories — hands-on industry labs that will bring IBM clients and partners from around the world together with the company's 1,000 Munich-based researchers, engineers, developers and business experts with the goal of driving innovation in the automotive, electronics, manufacturing, healthcare and insurance industries.

Why Germany?

Germany, as a global leader in manufacturing and industry, is a perfect match for IBM's IoT efforts, Greenstein notes.

"IBM is making tremendous strides to ensure that businesses around the world are able to take advantage of this incredible period of technological transformation and develop new products and services that really change people's lives," Harriet Green, global head of IBM Watson IoT, said in a statement Tuesday.

"Germany is at the forefront of the Industry 4.0 initiative and by inviting our clients and partners to join us in Munich, we are opening up our talent and technologies to help deliver on the promise of IoT and establishing a global hotbed for collaborative innovation."

Schaeffler

Automotive and industrial supplier Schaeffler, based in Ehningen, Germany, is just one of the customers that underscores IBM's move to center its IoT efforts in Munich.

Schaeffler on Tuesday announced a multiyear strategic partnership with IBM focused on the digital transformation of its entire operations and customer solutions via Watson and IoT.

"Our goal is to be the world's leading manufacturer of cognitive solutions which keep the world moving," Peter Gutzmer, deputy CEO and CTO, Schaeffler, said in a statement Tuesday.

"We are entering an age where parts can monitor and evaluate their own performance and even order their own replacement when necessary. Schaeffler is a world leader in product development and manufacturing, IBM in hybrid cloud and cognitive computing; through this partnership, we are ushering in the new industrial era."

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