This piece aims first to properly define what is meant by IoT, then look at real world projects which are already up and running and already providing a return on investment.
For enterprises considering a first project this should provide some guidance on what, and what not, to do.
From there we will take a look at the future of IoT and what the business world can expect to see in the next few years.
First of all some definitions.
IoT is not about being able to send emails to your toaster. It is a fundamental change to how computer systems collect data. Instead of relying on humans to input data through a keyboard it gives computers their own range of senses.
It means a network of sensors which can take measurements and transmit them to another computer for processing.
Where humans have ears, eyes and fingers so an IoT network can provide ways for a computer to improve its understanding of the systems they are connected to without human input.
Computers have had this ability for some time – in the form of bar code scanners, navigation devices and their satellites – but they have been limited and local rather than linked to a wider network.
Kevin Ashton, the man who created the term Internet of Things in the late 1990s, uses the following definition:
This is the meaning of the Internet of Things: sensors connected to the Internet,
behaving in an Internet-like way by making open, ad hoc connections, sharing data
freely, and allowing unexpected applications, so computers can understand the world
around them and become humanity’s nervous system.
Recent research from Hewlett Packard Enterprise’s Aruba found some interesting global differences between executives understanding of IoT and their organisations’ adoption of the technology: http://www.cbronline.com/digital-transformation/changing-face-mobile-world-congress/
Broadly understanding and adoption were in line with each other. Across the world 58 per cent of executives said their colleagues had a good or excellent understanding of the technology and a corresponding 57 per cent of organisations are using IoT already and another 32 per cent have plans in place.
Two anomalies were the United States, which claimed high understanding but had relatively low adoption, and South Korea where executives said their colleagues had quite low understanding, despite the country’s high adoption of IoT technology.
In fact South Korea, thanks to its unique culture and government help, is among the leading users of IoT. The country is building a unified, nationwide IoT network which will allow manufacturers to quite cheaply collect data from devices.
Confusion over networking protocols is still an issue for IoT projects, which is why the main management tools are capable of collecting data from Bluetooth, Wi-Fi and other IoT-specific networks like Sigfox and LoRa.
Internet of Things today
Although it is often promoted as a tool of the future there are lots of examples of IoT being used every day by enterprises. Aruba’s research found three quarters of companies using IoT were already seeing improvements in profits.
Every project is unique of course but there are some lessons to be learnt from these early adopters.
A popular use case is for companies which make quite complex equipment – maybe for manufacturing, printing or energy generation – and rely on maintenance and services to make their profits.
By adding IoT functions to the machines they sell they can hugely improve maintenance schedules for their engineers. Sensors tell them what has gone wrong, they can get to their customer with the right spare parts in a timely fashion.
But typically what might begin as an add-on to existing service contracts becomes a business in its own right.
Proper analysis and modelling of the data which the devices collect will allow a company to shift to predictive maintenance – they will now when problems are going to occur before they happen.
This will feedback to future design decisions for the next generation of machine.
But it can also allow the company to fundamentally change their relationship with their customers. Instead of seeing them twice a year, or however often the maintenance schedule requires, they can offer ongoing advice on how customers can get the most from their machines.
Of course this is not a bump-free journey.
It will require investment in IT infrastructure as well as a cultural willingness to embrace change from the whole company. But it can shift a business model from hardware provision to a fully-fledged service provider.
This has already changed jet engine makers into companies which work with their customers to provide ongoing services to reduce fuel use. It has allowed companies which sell smart building devices to promise customers continual reductions in energy costs.
IoT first steps
But IoT does not have to turn your business on its head straight away. In fact the best way is to start small and keep the project focussed on one specific business issue. Because the technology is typically interoperable and scalable it does not need to be designed from the endpoint backwards.
The whole point of the technology is that it gives the enterprise access to knowledge it did not previously have.
Predicting the impact of that knowledge on business decisions is obviously impossible.
If a pilot project reveals something unexpected it can relatively easily be changed in terms of scope or size to reflect that new knowledge.
The most shocking finding from Aruba’s survey was the number of IoT projects which had suffered some sort of breach. 84 per cent of companies which use IoT technology have seen a breach related to the technology.
Security should be at the centre of any technology design but for IoT which can open thousands of potential access points to the corporate network this is even more crucial.
After security remember that size isn’t everything – IoT technology does not require an enterprise-wide roll-out to prove its effectiveness.
Concentrating on one business issue – reducing downtime caused by one machine, cutting energy costs, improving engineer response times – can be a great way to trial the technology and prove its effectiveness to the company as a whole.
Although there can be benefits from even a simple project the real value is in the data collected.
Too many enterprises ignore this step or think it will happen automatically. Aruba’s survey found 97 per cent of those running IoT in the enterprise were still struggling to get value from the data produced by their IoT networks.
This can be down to lack of investment in infrastructure. But it is often down to the process of dealing with the data itself.
Even simple data sets will contain ‘noise’ either irrelevant or just plain wrong readings which need to be removed before any analysis is done.
Turning raw data into useful and actionable knowledge is an art as much as a science. If you don’t have these data skills in-house you will need to find a partner who can help.
IoT and the future
There is little doubt that IoT will bring digital disruption to areas of industry, agriculture and energy distribution which have been quite static for years.
This will be driven by falling prices for devices and the push towards interoperable networks or one ubiquitous network.
Governments in South Korea and the Netherlands are building nationwide IoT networks. Their success or failure could have a radical impact on adoption elsewhere.
But regardless of scale one of the key benefits of the technology is that even small scale adopters are seeing a return on investment.
If you start small, stay secure, are ready to be wrong and remain focused on the business outcome you can’t go far wrong however the technology develops.