By Marc Boudria
The Internet of Things promises to bring exciting changes to the competitive landscape as more and more companies implement an IoT strategy in 2015. Your company should be one of them.
It’s kind of a big deal
We’ve heard for the last couple of years, especially at CES, about how revolutionary, disruptive, and game-changing IoT will be – that turned out to be right on the money, literally. Analysts have sized the market in the trillions of dollars per year. Fortune 500 firms like GM, GE, IBM, Whirlpool, Cisco, John Deere, and many more are making significant capital and intellectual investments in IoT and sensor technology. By 2020, IDC estimates that over 40% of all data in the world will be a result of machines talking to each other. This has the attention of investors who will want to know how you plan to capitalize on IoT.
The benefits can be immediate
Take a deep breath and try to put the idea of billions of connected devices talking to each other out of your head. IoT is the natural confluence of the Internet, chip technology (smaller, faster, cheaper), more powerful software, and the wonderful world of the cloud (data storage). Of course, businesses have been using these puzzle pieces for quite a while. But when you combine them, it’s a thousand-fold game changer. But don’t freak out if you do not have any IoT implementations just yet (and 42% of companies do not), there are easy places to start and have a big impact. A good place to start is to look at your operating expenses. Many IoT implementations increase efficiency from existing assets, such as companies using smart sensors on HVAC systems to reduce energy costs based on zone occupant awareness, all the way to using sensors on factory robots to predict maintenance needs.
Your customers will expect it
As we said earlier, several big companies are already all in, and soon the majority of consumers will expect their products to have some sort of IoT component. GM is installing OnStar in all its lines in 2015, and other automakers are following suit with their own WIFI enabled connected vehicles. 21% of consumers own a wearable device, and the market is expected to grow by 130 million by 2018. Google just spent $3.2 billion for Nest, who is selling an estimated 100k thermostats a month. Starbucks receives 11% of its transactions through its mobile app. Consumers are already streaming vehicle data to their mechanic and using their phones to pay for lattes and turn up the a/c before they get home. They are primed for more positive IoT experiences and will start asking questions like: why can’t my fire detectors send me a text when the batteries are getting low instead of beeping at 3 a.m.?
No industry is immune to IoT
Apart from the consumer space, with all its Fitbits and and Nest devices, industrial manufacturing is a predictable early adopter in the application of IoT, followed closely by medical devices, utilities, and auto manufacturing. And there will be several more IoT implementations in a wide variety of industries, as well as the birth of completely new verticals as this rolling snowball quickly becomes an avalanche. Retailers are becoming “smarter” and want their suppliers to connect in with their store and inventory data systems. Even agriculture http://venturebeat.com/2014/12/07/surprise-agriculture-is-doing-more-with-iot-innovation-than-most-other-industries/ has been fertile ground (pun intended) for IoT.
Act now for profit and to protect your infrastructure
The Sony hack is the new reality. IoT brings with it an increase in the velocity, volume, and variety of data. This (big) data needs to be stored, secured, accessed, analyzed, and used in a way that best benefits your company. Your IT department will need a data storage strategy that is cost-effective and scalable. You will need to approach privacy and security with new vigilance. An IoT hack could do much more damage than a current breach because it gives access to control systems and not just to view them.
Most companies implementing IoT do not have all the capabilities needed internally. Of companies who have implemented IoT, 60% turn to a partner for technical expertise. Companies pursuing IoT also need to boost the skills of their employees. IoT data is big. You are going to need to increase the number of analysts you have, and the software they can tap into. Your sales, marketing and product development groups might need training as your products become more services than “things.” Making these investments today will help position your company to move quickly in the IoT affected marketplace.
Chaos Theory is a Chaotic Moon Studios publication. We are a creative technology studio in Austin, TX obsessed with creating innovative user-centered design and developing intelligent custom software for the world’s biggest and best brands. To engage us about a potential project, send an email to firstname.lastname@example.org