IoT Why now? What’s new? : Did you know the term “Internet of Things” (IoT) was coined way back in 1999? Some of the key elements of IoT have been around for a pretty long time. Oil fields, for instance, have had 1000s of sensors for quite some time. SCADA systems have been around since the 1960s. What’s new is the ability to connect billions of sensors/devices to the Internet. What’s new, is the ability to analyze petabytes of data streaming in from these devices, and then to drive decisions. Also what’s new, is that devices have become a lot smarter with better processing capability and lower cost. The convergence of these developments has created a powerful mix. So much so, that IoT is expected to drive the next Industrial Revolution – Industry 4.0. The convergence has also created a powerful set of expectations. So much so, that IoT sits right on top of Gartner’s Hype Cycle.
Is it overhyped?
Our take can be summarized as follows —
Near-term value: Over the next 3-5 years, IoT will definitely transform certain processes across some industries/environments
- Inhibitors: However, significant hurdles will have to be overcome, to quickly cross the “Trough of Disillusionment”, and realize the full potential.
Monetization: A lot of value will come from integration, and novel business models will be needed to share this value equitably amongst the participants.
Let us elaborate.
IoT indeed is for everyone. It is useful to think of a maturity model for IoT. Wherever you may be on this model, chances are there is some implementation / upgrade that will be appropriate for you in the near future.
The maturity of IoT adoption and the ability to move to the next level will govern the near term value created. E.g. the monitoring phase is mature in the process and manufacturing industry, and the near-term value for them is how quickly they can climb to ‘Predict’ and ‘Optimize’ levels.
The macro-economic environment also has a direct impact on the value delivered. For instance, in developing economies, implementing a simple monitoring solution (e.g. monitoring water transportation from a reservoir to tap) can give huge benefits and value, as compared to same in developed economies. At the same time, developed economies can harvest value by implementing predict / optimize the solution for their existing monitoring solution.
Hurdles around sensor / device costs, system security, and organizational structures, while non-trivial, will get addressed sooner – driven by the economics of IoT. Hurdles around data ownership, interoperability and infrastructure will be more complicated to overcome, and could hold back IoT from delivering its promise fully.
- Data ownership and privacy: These topics have been debated in the context of social media – does the data belong to the user, or to the platform provider, how much can be shared, with whom etc. Fresh debates will arise in the wider context of IoT, when an enterprise gets connected with its suppliers and customers more seamlessly. These debates may have to be resolved case-by-case and hence may take a while to settle down.
- Interoperability: The current phase of “creative chaos” will lead to robust and scalable solutions in the long run. In the short run however, the explosion of point solutions and even of platforms, can lead to severe interoperability challenges. While industry consortia like the AllSeen Alliance are working on evolving common standards, the challenge is unlikely to get resolved in the short run.
Infrastructure: Many use cases require a level of infrastructure that does not yet exist in developing economies. The “digital divide” has reduced but is far from gone. There are regions that still don’t have electricity. Internet penetration rates in Asia and Africa are still less than 40%. Where access exists, speed and reliability is often lacking. It is no wonder then, that as per OECD’s 2015 report, variation in the number of online devices per capita is not a few percentage points, but is in the range of 3x – 5x!
After successful 5 years stint in a corporate role, Nitin is back to what he enjoys most – conceptualizing new software solutions to solve business problems. Nitin is postgraduate from IIT, Mumbai, India and in his 19 years of career, has played key roles in building a desktop as well as enterprise solutions right from idealization to launch which are adopted by many Fortune 500 companies. As a Founder member of Pratiti Technologies, he is committed to applying his management learning as well as the passion for building new solutions to realize your innovation with certainty.