50 billion devices connected to the Internet. 10 trillion Dollar opportunity. 17 zettabytes of data storage.
I can read (or make up) statistics as well as the next person, but do these figures actually mean anything? I suspect they are somewhat missing the point.
In order to make some sense of IoT, we need to look at it from two different but inter-dependant perspectives:
- What it is
- Why it is
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The WHY needs to be understood for each and every IoT project. Without some sort of business return, projects will never get off the ground. However, without looking at the WHAT, it's very hard to start imagining how it can help us in the first place. So let's start there.
Most definitions of IoT start with something like "the interconnection via the Internet of devices (things), enabling them to send and receive data." This is not the whole picture. We need to include in our definition what can be done with this new data through analytics or data visualisation. We can potentially discover new business insights to help us either reduce costs, provide new services or revenue streams or to improve our competitive edge.
This all sounds a bit fluffy until you apply it to an example:
- Car insurance is highly competitive. Premiums are affected by a driver's history with factors like length of driving experience, no claims periods and previous accidents. IoT has enabled insurers to modify premiums based on actual driving behaviours. The addition of a "black box" to the insured car enables tracking of acceleration, speed and position. These devices are connected to the internet via mobile network. Not only can the insurer monitor individual drivers, they can also use data collected across all their customers to start building a much richer picture of risks. For example, identifying high risk areas for collisions. This data could potentially be shared in anonymous form to external parties for a fee. Examples could be the police who may have an interest in areas where speeding is rife, or the Highways Agency interested in accident blackspots. With a better understanding of risks, the insurer can potentially undercut their competition or devise new policies which are tailored for specific demographics.
There are some technology trends which are combining to enable organisations to realise value from IoT projects which would not have been feasible in the past.
These are why IoT has become such a hot topic.
- Sensors can be wirelessly connected to the internet within small battery powered modules which can last for years without replacement.
- Mobile carriers are using IP based protocols and developing low cost narrowband connections. These support use cases which are becoming commercially feasible for the first time.
- Real-time and historical analytics capability has become affordable and readily available to a wide audience and can be consumed in multiple ways including on-premise or cloud.
- A number of vendors are productising these solutions and making it easier and quicker for customers to leverage the Internet of Things.
The two main challenges for anyone wanting to cash in on IoT are directly related to our two perspectives:
- WHAT is it
Projects span a huge range of technologies from "things" through to data analytics. It will be hard for a singe supplier to provide expertise and services capability across the whole spectrum. A partnership approach will often be the only workable option.
- WHY is it
Even with expertise across the IoT spectrum, projects will never fly without a strong business case. Suppliers will need to couple their IoT skills with a deep understanding of their customer's business and engage using a consultative approach.
Finally, IoT projects can be bespoke and costly. The secret to success will be the identification of verticals where solutions can be developed with a wider market appeal.