Smart meters, smart homes & smart cars – tech terms you read about every day. What is it that makes them so smart? The answer lies in not one, but many technologies collectively called the Internet of Things or IoT. That’s why it’s appalling to note that more than eighty percent of people in the world haven’t heard of the phrase ‘Internet of Things’ – a term that represents all devices that collect and transmit data over the web. By 2020, there will be tens of billions of data-spouting devices connected to the Internet. And they’re already changing how we live and work.
IoT is Becoming Omnipresent
All physical devices that play an important part in our daily lives can be IoT devices. What makes them unique is that they have sensors, actuators, and embedded communication hardware to remain connected to the internet. ATMs were the first IoT-related devices that were in use as early as 1974. The story of the ATM’s rapid rise to ubiquity is also one of a revolution in retail banking. The staff at modern retail-banking branches are now free to engage customers in higher-value services, such as insurance, mortgages and stock-market trading. ATMs are proof to the fact that there are alternative distribution channels to brick and mortar branches. This innovation opened the door to more advanced customer services like telephone and Internet banking.
That’s the power of IoT devices! As technology protocols are advanced, more and more devices have now begun to interact with each other. Together, they have become more aware, autonomous and capable of providing actionable insights into the world around us.
2015 saw the rise of a lot of niche companies such as SIGFOX, EVRYTHNG, Aeris, Ayla Networks, and Axeda (now part of PTC) focused on building IoT platforms and communications networks. Major chip manufacturing and design companies, including Intel, Qualcomm, and ARM, are also active in creating ecosystems for device manufacturers and network providers. Most IT and network companies such as Oracle, IBM, Microsoft, Cisco, and Juniper are actively investing in this area.
As we begin 2016 with 4.9 billion connected things in our world, it is now apparent that organizations across all industries will use IoT to create new operating models, bring products to market faster, and develop more efficient business processes.
Helping Small Businesses Find a Sweet Spot
I0T has significantly impacted the timeline of small teams producing things with limited resources. For example, the cost of innovation for biology-related technology is dropping substantially, creating a faster timetable for implementing change. It overrules the greatest barrier in the manufacturing arena established by the Moore’s Law for processors. Look at the substantial drop in costs of gene sequencers, from a $2.5 billion estimated in 2003 to the new $1,000 handheld sequencer. Such a reduction lowers the barrier to entry for new businesses involved in high tech.
Not just that, small companies can now make their mark in the market by leveraging IoT in their client-end offerings too. Valarm, a small business startup that specializes in monitoring systems, has championed a way to add sensors in various areas of life. For example, the company has installed sensors to a vineyard to detect cold temperatures and prevent grapes from being ruined in Southern California. It’s a simple idea really, but with a profound impact. The sensors activate sprinklers when the temperature drops. It encases the grapes in ice, thereby protecting them.
The most interesting part is that the company figured out that it could use old smartphones, which cost them next to nothing, as mobile sensors. Obviously, old mobiles are cheaper than a sensor network. Essentially because Valarm has worked out a way to get the job done in about one-tenth of what it would otherwise cost. Not only does this let Valarm compete with larger rivals, but it lets small vineyards hold their own against major vineyards that can afford more sophisticated systems.
RainMachine, another small business, targets home irrigation systems. Traditionally, controllers for systems like irrigation are hard to setup and difficult to operate. So, RainMachine has figured out how to combine inexpensive sensors and smartphones to gather accurate weather data at regular intervals. The company then programs sprinklers to adjust themselves automatically to keep a garden healthy.
Another ad-hoc example could be maintenance services. Today’s businesses that depend on product sales are involved in on-call maintenance services for their products. In competitive markets, this service sector alone can double up its profit margins by employing real-time monitoring devices over the entire maintenance process. IoT could also work wonders for a business involved in tracking buses, limos, trucks, and golf carts. Sensors can monitor fleet location without small businesses having to adopt the expensive systems of their major rivals. As you can see, this list can go on. Moving on.
How Enterprises Can Offer New Services to Customers
Not just small businesses, the internet of things presents enterprises with the opportunity to create value in areas such as analytics, forecasting, and customer service.
Analytics: A discussion around the topic of IoT is incomplete without talking about analytics. Working with connected devices involve large amounts of data. The right way to do analytics is to process and analyze the data to gain insights, and those insights must drive actionable steps that can impact business favorably.
UPS, one of the largest shipping companies in the world, has been using sensor data and big-data analytics to save cost, boost efficiency, and abate its environmental impact. The company uses sensors on its delivery vehicles to monitor speed, miles per gallon, mileage, the number of stops, and engine health.
According to UPS’s website, it manages more than 16 million shipments a day, all over the world. Its single integrated and optimized network results in environmental benefits such as reductions in fuel use and greenhouse gas emissions. To make the system operate more efficiently and reduce environmental impact, UPS designs, acquires, implements and optimizes information technology for continuous improvement. Technology has helped UPS fine-tune various aspects of its operations – from planning and routing to flying and driving – something that’s good for business and the environment. A critical tool for achieving sustainability improvements is the use of big data analytics. According to an infographic released by UPS, the sensors capture more than 200 data points for each vehicle in a fleet of more than 80,000 every day.
Forecasting: Retailing giant Walmart heavily uses big data to gain better consumer insights. By using strong social media analytics, it understands what types of products are rising in popularity and compare local weather data against its sales data to boost grocery sales. For example, Walmart’s sales data shows sales for salad ingredients grow when the forecast suggests temperatures above 80 and light winds.
Customer service: This is an area that most enterprises have seen more tangible benefits. With the help of connected devices, companies are now empowered to make better decisions after seeing how customers are using their products.That is some invaluable insight, especially when it means doing away with tedious trial and error. Take the example of Philips hue LED bulbs. Philips has made lighting controls better by allowing its consumers to control lighting with their tablet or smartphone. The days to magically program the lighting at your home to dim at night, or blink if they detect an intruder are finally here.
Not just that, real synergy could be used to the business’ benefit by offering customers gamified incentives. For example, a health insurance company can deploy wearable devices to its clients to receive real-time reports of their physical data like sleep cycles, heart rates, diet and exercise regimens. Patients who invest themselves in more healthy activities could be eligible to receive discounts while those with mild arrhythmia reports would pay a higher rate. This exercise can also help the insurance companies locate its customers via GPS and provide door-to-door document collection services.
A Quick Look at IoT-Assisted Industrial Transformation
To be successful, it is now incredibly important to establish a strong differentiation between your brand and the rest of the market. Let’s take a look at a few large industries such as healthcare, education and transportation to understand the growing presence of connected devices.
Smartphones are already at the center of healthcare as hospitals are rethinking their ability to provide care and treatment. Smartphone innovations are being supported by the proliferating numbers of remote health monitoring devices, hitting 4.9 million in numbers in 2015 according to a recent Berg Insights report. On the other side of the spectrum, is the rise of the ‘empowered patient’. That’s right. The growing popularity of Remote Patient Monitoring (RPM) devices is impacting providers by reducing hospital admissions. IoT is providing patients with more opportunity to monitor their health through apps and products that take diagnostics and treatments out of a hospital and into the home. Most might call these advancements invasive, but while debates for health data privacy continue, wearables that debuted as fitness trackers are now embedded in clothing, and even under the human skin.
IoT is also being tested in select classrooms today, laying the seeds for the future of how students could learn. Some educational institutions in developing economies like India, for example, are dabbling in gesture-based controls feeding data to Internet-connected devices. From pinging students’ GPS locations during a field trip to recording point-of-view lessons, educators are exploiting wearables to gain more options to monitor and engage with their students.
According to Accenture, auto companies, heavy machinery and medical device manufacturers, logistics and industrial goods companies such as BMW, Fiat-Chrysler, Caterpillar, Maersk, GE, Honeywell, ABB, Emerson, and Siemens have made serious commitments to IoT including significant R&D investment, growing new partnerships and talent hires. Google or Amazon’s acquisition of companies such as Nest and 2lemetry are the most recent examples of remarkable change in the transport industry. Google’s self-driving cars are clocking in about 10,000 miles per week. Over 250 thousand vehicles will be connected to the internet by 2020.
It may be too early to tell the fate of these initiatives but most of the pioneers mentioned above have an inherent advantage. They have strong balance sheets and the capability to engineer and develop products to realize their IoT opportunities. So, it might be a solid bet to look at a majority of them as future game changers not just within their industry, but across the market spectrum.
IoT will have sweeping impacts on the way the world works and lives, and is even providing some cool answers to contemporary business challenges. What we should be wondering about is: are we asking the right questions? Do you think IoT is here to make positive impact or is this a flawed approach? Please leave your comment below.