IoT – The Tipping Point of Defining a New Industry Trend
A decade and a half after the “dot-com bubble”, the Internet is expanding again, connecting all devices found in our businesses, cities and homes. This expansion has been branded as the Internet of Things or simply IoT. It is expected to bring along the 4th Industrial Revolution and to change forever the way businesses, governments and consumers interact with the physical and virtual worlds.
The latest news about the IoT industry is remarkable and bold. Recently, I attended an event in London, where, together with IoT enthusiasts, specialists and platform providers, we tried to work out the impact IoT has on the market and what challenges it will bring along.
The main consensus on the event floor was that we have barely scratched the surface. With 6.4 billion connected devices in 2016, Gartner estimates that we will break the 30 billion mark by 2025, and some believe it will be even as high as 50. Whatever the case, another fact that most agree on, is that IoT is a C-suite topic. This is due to the transformational effect IoT has on operations and the way businesses will run in the future. Easy to understand when you consider that McKinsey estimates that linking the physical and digital worlds could generate up to $11 trillion/year in economic value by 2025.
New Business Opportunities
Moving forward from predictions to strategy, it is fair to say that besides a roadmap to a connected world, IoT will be the main factor in creating new business opportunities. This will include:
Brand-new business models, as the IoT will drive the creation of new value streams for customers through diversity and a quick response to customer needs. For example, Augmented Reality is a “cherry-on-top” service that may change the way some businesses will offer maintenance and support in the next years. It’s also expected that IoT will increase transparency and make it simple for companies to have a look inside the business.
Moreover, through real-time data, enterprises will be able to capture data about processes and products way faster and radically improve market agility. In Industrial IoT, gathering live information is still the most popular business application, helping factories worldwide answer the question “what could happen next” in order to take wiser decisions based on data rather than tribal knowledge.
However, while IoT will create new business opportunities and provide higher ROIs, many people believe that budget constraint, transformational impact on the overall organisation, conservative mindset and execution will be some of the challenges of the connected technologies adoption.
A View on IoT Adoption
Following the previous ideas, we could have a look at the IoT adoption in the future and the main benefits it will bring along.
Businesses are foreseen to be the first adopters of IoT solutions due to the benefits of increasing productivity, lowering their operating costs and developing new product offerings. Beside connectivity, live data and predictive maintenance, the main advantage IoT offers, is the power to increase the value of a product years after it has been delivered.
Furthermore, it is expected that more and more companies will have a “Chief IoT Officer”, especially in the Industrial IoT, which heralds an era of unlimited potential to change the industrial landscape. Also, experts see a big opportunity for the IoT consulting area, as companies need a guiding and trustful partner throughout the adoption process.
Governments are focused on increasing productivity, decreasing costs, and improving their citizens’ quality of life. We believe they will be the second-largest adopters of IoT ecosystems. Chi Onwurah, a Member of the British Parliament, said that some Smart City concepts are already under way, but it is still a long way to implementing a full IoT initiative due to regulations, privacy concerns and budget.
“Start small and dream big” seems to be the key to more implemented ideas in the public sector. For example, local authorities make budgets go further with LED smart street lighting that doesn’t need regular maintenance, but can automatically report when it needs to be repaired. Also, Smart Grids projects are already seen as a gateway towards a better quality of life, allowing customers to benefit from potential savings, a more secure power supply and transparency regarding electricity consumption.
Consumers will lag behind businesses and governments in IoT adoption. Still, they will purchase a massive number of devices and invest a significant amount of money in IoT ecosystems. For consumers, smart home solutions are the start of a new era. Being able to communicate with your home devices and teach them how to behave depending on different factors is a big step forward.
Having all the facts and predictions, it’s easy to understand why the IoT industry is rapidly evolving from a rigid Machine2Machine technology to a more flexible, business-connected solution, where collaboration between companies, governments and individuals is at the base of designing the future of the Internet.
Even at this early stage, IoT has a real and measurable impact. There is no doubt that 2016 will see huge steps forward, which will radically redefine what it means to be connected.