IBM Introduces Twitter-Fueled Data Services for Business

IBM is betting a fair share of its future on exploiting large troves of data for its business customers, and Twitter is a big-data fire-hose with 6,000 tweets a second, more than half a billion each day. And Twitter’s data-licensing business, though still a small part of the company, is growing rapidly.

IBM and Twitter are bringing out the first products on Tuesday, developer tools and cloud-based data analysis services that mine Twitter data. The data services run on IBM’s Watson artificial intelligence technology and on its flavor of Hadoop, the open-source software for processing big data across computer clusters, IBM BigInsights. The developer tools will allow people to write applications that pull in Twitter data.

In recent months, IBM has trained more than 4,000 engineers and consultants on using Twitter data in business projects. Its goal is to have 10,000 IBM employees with Twitter data-handling skills. And IBM has worked with more than 100 corporate clients so far, in a range of industries and projects.

“We thought the early interest would be in consumer products and marketing, but it has turned out to be much broader than that,” said Alistair Rennie, general manager of IBM’s analytics business. The early work, he said, included companies that want to tap the Twitter data to help guide product development and plan manufacturing schedules.

IBM is not naming the companies that have tried out its Twitterized technology, but it did describe a few examples of what it calls “insight as a service.” It combined tweets with hyper-local weather data to help predict where disgruntled telephone or cable customers, whose service might be impaired by severe weather, were most likely to switch suppliers. Using the data-fueled predictive models, customer churn was reduced by 5 percent, IBM says.

Another case involved an unnamed drink and food retailer with thousands of shops. IBM blended Twitter data with sales tracked on loyalty cards and smartphone apps, as well as employee data. It found that the company’s best customers were the ones most influenced by turnover in the chain’s sales associates. In short, the human touch matters most to your most loyal customers.

IBM has plenty of competition in mining social media data for insights. Rivals include big companies like SAS Institute, Adobe, Oracle and Salesforce, and start-ups like Crimson Hexagon and DataSift. IBM’s deal with Twitter is not exclusive.

But David Schubmehl, an analyst at IDC, said that more than its competitors, IBM was focused on applying the Twitter data to a wide range of uses, beyond marketing to tasks like churn analysis, talent management and product development. IBM, Mr. Schubmehl said, is ahead of most of its rivals in its knowledge of many industries. “And it’s the combination of internal corporate data and external data from sources like Twitter where the real payoff is going to come from,” he said.

For IBM, the pace at which initiatives like the Twitter partnership can grow into sizable businesses is crucial. Virginia Rometty, IBM’s chief executive, has called 2015 a “transition year” as newer growth businesses like data analytics and cloud-computing pick up the slack for the erosion of its traditional hardware and software businesses. The faster the newer businesses grow, the smoother the transition.

For Twitter, the data business looks set to play a larger role. In addition to advertising, Twitter now reports its “data licensing and other revenue.” It grew by more than 100 percent in the fourth quarter of 2014, to $47 million. “Twitter is the world’s best focus group,” said Chris Moody, vice president for data strategy at Twitter. “We’re a data gold mine. We know a lot about the world and a lot about customers.”

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