by Maryfran Johnson

Exploiting Big Data From the Heavens

May 28, 20132 mins
Big DataData Management

The weather is good for more than just small talk, says Maryfran Johnson. It's a big business, with companies like The Weather Channel and AccuWeather selling data analytics to businesses like DHL and Sears, who use weather data to make timely decisions.

Every week I chat with CIOs from all over the county, and invariably we start with some small talk about the weather. Living in the Boston area (where “fifties and raining” is not an uncommon report), I’ve usually got something to complain about. As a universal icebreaker, you really can’t beat weather chitchat.

What I hadn’t realized–until I spoke one day with CIO Bryson Koehler of The Weather Channel–was how much big business and profit potential turns on those whims of Mother Nature. “Weather is the original big-data problem,” says Koehler, whose IT staff processes 20 terabytes of weather data every day.

“Weather provides no shortage of business opportunities because it affects everyone,” writes Managing Editor Kim S. Nash in our cover story (“Companies Profit From the Ultimate Big Data Source: The Weather”), which takes you on an illuminating tour of the weather-data industry. “Demand will probably never ebb. As a result, the world of weather data is competitive, niche-y and expensive.”

Indeed, multi-million-dollar decisions by retailers, pharmaceutical companies, transportation giants and scores of other companies now hinge on how well they make use of this wealth of heaven-sent data.

DHL Express, for example, uses weather data to make decisions affecting 3,000 flights a day worldwide. In 2010, the company relied on its weather-tracking tools to decide when it was safe to fly into western Europe after the eruption of an Icelandic volcano halted air traffic for eight days.

Home insurer EMC Insurance uses weather data to check the veracity of hail-damage claims. Sears made profitable use of in-depth forecasts as snowstorm Nemo approached in February. The retailer rerouted its supply chain to get extra snowblowers and generators closer to affected areas.

“If you’re selling seasonal products and you’re not using weather data, you’re not doing your job,” one supply-chain consultant tells us.

Advances in analytics technology paired with a plethora of weather data allow greater analytical creativity and exactitude, says Tom Davenport, a senior adviser to Deloitte Analytics.

As data-analysis capabilities grow more sophisticated, custom services are springing up to cater to corporate needs. AccuWeather, for example, can crunch point-of-sale data against some 200 weather variables to identify retail patterns. Can you guess what the top-selling selling food during hurricanes is? (Hint: It’s blueberry-flavored.)

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