The $55 billion agricultural products company
) announced that it will purchase data analytics firm The Climate
Corporation in a cash deal valued at $930 million. Climate Corp.
uses trillions of data points -- including historical and current
agriculture and weather information -- to offer insurance policies
to farmers. For example, the firm's system knows the exact
topographical shape of every one of the 20 million croplands in the
United States, what is grown on them, and their yield volumes in
any given year. Every simulation Climate Corp. runs for insurance
clients takes over 5 trillion data points like these into account.
The acquisition will give the agriculture giant a vital asset in
its continuing production of the most viable crops whether they are
natural or genetically modified (the latter is more often the
Here is a selection from Monsanto's press release regarding the
The acquisition of The Climate Corporation represents a natural
extension of Monsanto's vision to increase crop productivity,
conserve more of our planet's natural resources, and improve the
lives of people around the world. It will also greatly expand The
Climate Corporation's capabilities in data science, agriculture's
next major growth frontier, an area that represents a potential
opportunity of $20 billion beyond Monsanto's core focus today. The
companies estimate the majority of farmers have an untapped yield
opportunity of up to 30 bushels to 50 bushels in their corn fields,
and they believe that advancements in data science can help further
unlock that additional value for the farm.
It's not just farmers who are excited about the imminent
intersection of agriculture and big data: Since Climate Corp.'s
founding in 2006, venture firms have poured more than $110 million
into the firm; investors include
) Ventures, Index Ventures, First Round Capital, and Allen &
Monsanto's next step into the connected world raises a question:
Can data analytics offer other industries the ability to unlock
profits as well? The answer is most absolutely yes.
On its website,
) lists several statistics from companies that use its big data
the power that data analytics has to increase return on investment.
IBM claims that its health care clients decreased patient mortality
20% by analyzing streaming data. IBM also states that its
telecommunication clients saw a 92% decrease in customer processing
time with network and call data, and that its utilities clients saw
99% improved accuracy in the placement of their power resources.
Perhaps the industry most associated with data analytics is retail.
claiming that as much as $81 billion of 2013 global retail revenue
was made possible by the use of data -- by the so-called "Internet
of Everything." Moreover, Cisco claims that global retailers could
have brought in additional revenue of $99 billion had they been
more connected across all operations.
Data analysis offers companies the ability to unlock profit by
giving them a higher level of sophistication in targeting specific
consumer needs. Retail companies depend on data from human
behavior, whereas companies like Monsanto rely upon the behavior of
weather, soil, plants, and animals. So develops the "Internet of
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