IoT: How to make money and disrupt your competition


Eventually everything connects – people, ideas, objects. The quality of the connections is the key to quality per se.
– Charles Eames

Our world is getting covered on a planetary scale with a digital skin called the Internet of Things (IoT). It’s made of sensors, networks, actuators and lots of data. IoT will impact everybody by connecting just about everything. While the process is well underway, and interest levels are rising (chart below), we are nowhere close to being done.

 

Internet of things - IoT Interest Trend

 

There are numerous hurdles to overcome. For example, the lack of standard protocols resulting in too many regional dialects between devices and security concerns. What types of devices will succeed? Are we going to have “weak devices strongly connected” or “strong devices weakly connected?”

Who knows – it’s still the Wild West!

That said, vendors across the technology spectrum are gearing up to, “sell shovels for the gold rush.”  Service providers like PwC have provided architectural patterns like the “thing stack.”  Microsoft recently announced Azure Internet of Things (IoT) and Azure Machine Language (ML) to facilitate emerging IoT scenarios. Cisco, Google and Apple are all betting big. The image below, courtesy Microsoft, shows how “eventually everything connects.”

 

Microsoft's IoT

 

Once everything connects then it becomes all about the data. IoT devices will generate so much data it will make dealing with the big data of today feel like a walk in the park. We are betting that data storage vendors will be the first ones laughing all the way to the bank.

Ok IoT, show me the money!

If you are not one of the big vendors like Cisco or Microsoft but are interested in taking advantage – where should you focus?

If history serves as a precedent, it’s probably not the hardware or infrastructure. While the rollout of IoT’s infrastructure may be interesting, the really interesting stuff will happen on top of this infrastructure. The layer where software services, apps, analytics and APIs bring it all together. This is where digital business models, described by Westerman, Bonnet & McAfee in Leading Digital, will emerge and existing ones will get disrupted. This is where the money is!

You need to begin by asking yourself,  “How do these interconnected devices and the data they generate make it possible to change the entire experience and workflow of a job we do in the real world?”

Unless you change to behavior or automate something, your returns will be limited.

Let’s consider a few real world examples to get the gears turning.

Calibrated Insurance

With the help of telematics, insurance companies like Progressive and Allstate will be able to collect data that allows them to create better predictive models and provide discounted premiums to good drivers. Sounds a bit creepy but they promise that premiums for lousy drivers won’t go up. You either get a discount or you don’t.

The reason this works is because it changes driver behavior and impacts how much money is spent on premiums. Good drivers will be drawn to the innovative insurance providers who can provide them discounts.

Predictive Maintenance of Remote Devices

Mariner recently helped a company which manages hundreds of industrial batteries and charging systems for Fortune 1000 companies. Servicing a fleet of devices requires an army of technicians doing periodic scheduled maintenance. This is not a “smart” approach – it’s brute force. And it does not scale.

We built a system where data generated by these devices is analyzed and technicians are dispatched pre-emptively based on the analyzed condition of the batterie. The process is known as condition based maintenance or predictive maintenance. This approach not only prevents incidents, like downtime, but also extends the life of the devices being monitored and requires a leaner workforce. (Read our predictive maintenance – PdM – case study for more details.)

In both the examples above, the smart use of device data facilitated changes in behavior that translated to money.

The eventual winners in the IoT gold rush will be the ones who make the smartest use of all the data.

How do you anticipate IoT and its deluge of data impacting your business?

 

Shash Hegde, Technology Solutions Specialist at Microsoft, contributed to this post.

Joe Guy

Joe Guy

COO & Co-founder at Mariner
Joe is passionate about helping companies leverage their information assets using IoT and Advanced Analytics to gain strategic business insight to improve revenue and profitability. Joe is involved with business development and strategy and leads the operations and human resources areas of Mariner, ensuring that our customers achieve their goals while our employees have a blast helping them do it.
Joe Guy

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