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We hear so much about the potential of the internet of things every day in the news. For the most part, examples and discussion is focused on consumer trends and products for IoT, but in the real world, enterprise and industrial IoT will be where the cool stuff happens … here’s why.
Our fascination with consumer products is pretty straightforward — it’s easy to identify with things we use every day at home and in our lives. This has been useful to get people educated and excited about IoT, but we need to move the discussion beyond the basic example of a coffee maker that will brew you a fresh cup of Joe when a sensor tells it you’re awake. Yes, that’s possible and there’s value in automating things that are a little tedious, but how much would you really be willing to pay to avoid pressing a button and waiting five minutes? We need to think bigger to understand where the real value of IoT will come into play.
There’s lots of market research out there and it all points to IoT being big … really big. Consensus says there will be around 20 billion devices by 2020, up from around 10 billion right now. Gartner’s recent forecast says we will add about 5.5 million connected things each day!
But how will all those connected things be split between consumer and enterprise IoT? Some forecasts, like that from BI Intelligence, expect enterprise IoT to far outpace consumer while others see consumer as the force driving the number of connected devices.
Looking historically at adoption of technology shows us how rapidly things are changing. While it took 50 years for most of the population to adopt electricity, modern trends like smartphone adoption show full adoption in a 5 to 10 year span. Older technologies mostly began as something available to only industry followed by becoming accessible to consumers. With vertical adoption curves, however, that distinction no longer holds and new technologies are almost immediately available to both groups.
Consumers and the firms serving them, at least right now, see the primary benefit of IoT as making life easier (although they may not even do that sometimes). While many products and services do incrementally increase efficiency or save some money, the primary benefit is that life is a little easier and the tech is really cool! The question, however, is what are we willing to pay for this benefit. It clearly isn’t a must-have, although over time we may eventually see it that way.
Enterprises, on the other hand, see the primary benefit of IoT adoption as a positive ROI (or NPV if you prefer). This can take the form of efficiency gains, cost reductions or even opening up new business models that were previously unattainable. When implementing IoT to automate a process could save even 1%, which can equate to billions of dollars, it’s much easier for an enterprise to take a calculated risk and be willing to pay to implement IoT now. Certain industries are already investing.
In industries like energy and agriculture, we have seen significant interest and action already. In solar energy, monitoring assets like solar panels, inverters and more to maximize uptime and performance is critical. If one panel is performing poorly, it can affect many others, and poor performance on a sunny day can be costly. Solar developers are already implementing IoT solutions for asset management that can overcome many of the challenges faced in the past like low power requirements, intermittent connectivity, real-time data needs and more. The need is real and therefore these enterprises are willing to invest in both the development of these technologies and their implementation.
Agriculture is also looking to make positive ROI investments by implementing IoT. Companies have looked to optimize how they use resources like water for some time by monitoring crop yields, soil moisture and more. IoT can take this concept to the next level by enabling a flexible (and more importantly cost-effective) platform that can handle many data streams from sensors in the soil, silos and tractors, weather feeds, pricing signals, supply chain details and more. As more information is brought together, the system becomes more valuable and a farm can make better decisions. Each farm will be able to pick and choose which connected services make sense and layer different offerings from different vendors for key advantages including:
- Operate more efficiently: Reduce fuel usage by optimizing speed, route and dispatch timing of harvesters based on real-time orders and needs
- Open new revenue streams: Provide detailed fertilizer, water and environmental information for each piece of food to conscientious consumers
The success of enterprise IoT will be driven by technical innovations and services that enable it. Tools like a scalable and secure IoT platform that operates in real-time, low-power/low-cost hardware to power devices and modern networks to transmit data are the building blocks for enterprise IoT, as well as consumer IoT to change how we operate and live.
In the big picture, the technology is ready and the need is there to drive IoT forward. While consumer services will certainly improve quality of life, enterprise IoT will face down some of the biggest challenges facing the world today:
- How are we going to feed 10 billion people?
- How do we improve renewable energies uptime while reducing its OPEX?
- How are we going to manage the future’s most valuable resource — water?
Ultimately, both enterprise and consumer IoT will impact our world in ways we can’t even imagine now, but it is enterprise IoT that will be the next big thing!
All IoT Agenda network contributors are responsible for the content and accuracy of their posts. Opinions are of the writers and do not necessarily convey the thoughts of IoT Agenda.