IDC estimates that as of the end of 2013, there were 9.1B IOT units installed. IDC expects the installed base of IOT units to grow at a 17.5% CAGR over the forecast period to 28.1 billion in 2020. The number of connected devices is growing at an astronomical rate these days as more and more manufacturers jump into the fray. From Nest thermostats to water sensors to connected home, it’s no surprise that firms like Morgan Stanley are predicting the number of connected IOT devices will approach 75 Billion by 2020. So what makes up this IOT market?
- IOT Platforms
- IOT Sensors – Connected Home, Connected Auto, Connected Work, Connected Life, Connected Consumer
- IOT Devices, Monitors, Controls, etc.
- IOT Applications and Mobile Apps
- IOT Network and Connectivity
- IOT Analytics
- Social Business
- Weather Data
- Consumer data – Health, Locational, Interactions, etc.
But what does this all mean for the manufacturer? What do they need to consider when laying out their connected device strategy.
The IOT is still at an early stage; the connected market has started over a decade back to monitor and control every information from physical and social environments. In the past, most of these units were hardwired together into a complex system but with wireless connectivity, mobile/telematics, cloud, analytics, intelligence and other technology advancements, the birth of IOT took place. For example, the Nest Learning Thermostat performs the basic function of an ordinary smart thermostat: It monitors, adjusts and maintain as per predetermined configuration. But the Nest also senses humidity, activity, and light, and its built-in intelligence “learns” how and when the user likes to adjust the temperature. It can even optimize the house’s temperature for energy efficiency. All this, together, still doesn’t make the Nest part of the IOT. But when it’s connected to an insurance company or the Nest Account (hosted by Google, Nest’s parent company) through a home Wi-Fi network, it has far greater value. That connection allows people to monitor and change the temperature from their smartphones, modify the heating schedule, and analyze their home heating activity. It also allows insurance companies to offer incentives for precautionary and timely alerts preventing losses.
Organizations are now accumulating terabytes and petabytes of data from various devices – machine, mobile, user, web logs and cookies, social media, etc. The challenge is not in storing this information, but in actually using this data for competitive advantage. Organizations are rushing to store this wealth of information fearing missed opportunities. This takes us back to the key questions: what, where and how do I start?
The key to winning the race to competitive advantage is not by storing all or most of the data, but by deriving value and insight that can be tied to a business outcomes, ROI and profitability. Here are the high level steps I recommend to begin your big data journey:
- Identify business use cases tied to business outcomes, metrics and your IOT roadmap
- Identify business champions and sponsors of your organization that can lead the IOT as business initiative
- Select right set of people, processes, technology including platform, solutions for your IOT project
- Build a lab – IOT Lab that can prototype different solutions and integration points. Use point solutions for speed to market and cost considerations but plan to build or buy or rent the underlying IOT platform before the system becomes overly complex with many point solutions
- Be Agile. Execute your project/POC in sprints or short projects with tangible and measurable outcomes that either increases efficiency, enhance customer experience, reduces cost, prevent losses or increase revenue
- Plan for the security and privacy of the data. Consider and simulate the risk of data breach.
- Build on small successes and integrate with your data platform and operational applications that will empower your field sales and customer representatives to use the insight to delight your customers
This is a journey and not an end or a destination. Improvise your processes, technology and finally train your people as ‘Connected World’ is here to stay and grow.