Everyone is talking about the
Internet of Things. So what’s great about this fuzz and how it impacts our life,
work and the way we conduct business. A survey shows that there are estimated
to be more than 50 billion connected devices by 2020 with an approximately
spent of $7 trillion. Looks like non-achievable figures, however the reality
shows that this is pretty much doable with the present set of technological
advancements in every area including cloud data and big data as the core and
availability of hardware semiconductor chips on very inexpensive prices. While
this is a prediction and we hope to see the reality, how we can get benefited
by creating new revenue streams to harness this business opportunity.
IoT is actually a connection of
varied set of devices talking to each other. Although IoT is a giant
interconnection of devices and technologies around these devices, At the core
of IoT, it’s not about the connected devices rather it is about the data
collected from these devices and converting this into meaningful information
after intense analysis and monetizes the same to win the IoT race. We are not
far away when shopping malls and showrooms will be flooded with IoT devices
whether you talk about a toy, home appliances, cars and many other accessories.
Our real concern is to find out the monetisation opportunities. Let’s
understand this with a small model:
In the whole IoT gamut, an
outcome is provided to the end customer who is actually the final recipient and
is ready to pay for the IoT products and services. The above model shows
various elements in the value chain that combined together provide a desired
outcome to the customer in an IoT ecosystem. Let’s deep dive into this model to
understand where we as an organization fits into and get the major portion of benefits:
- The start point for IoT to work efficiently is sensor embedded into existing or new appliances. These sensors collect the data in various data points based on the appliance usage patterns and customer behaviour. The data is send to a designated location based on the connectivity choices provided.
- Carrying data from sensors to the designated locations require an ecosystem of network consisting of physical network elements (wires, adaptors, switches, routers and many more backbone elements) and logical network elements (protocols and security layers). A set of protocols are used to flow information between devices on a secured network.
- These small sensors data require massive databases to store the contents. According to estimation, if there are 50 billion devices are going to be interconnected, we must have scalable databases to store these billions of records.
- Then comes the real task i.e. analysing the collected data coupled with support services and converting this into meaningful information so that business opportunity can be realised. This is the area that we can explore more where the actual business exist for majority of the companies who provide support services to its clients.
- Some of the information is shared with the customers and other information can be used for machine learning, marketing campaigns and cross selling etc. without compromising customer’s personal information.
If we analyse the above IoT
ecosystem model, we can identify the areas where maximum ROI can be achieved in
minimum Capex and timeframe.
Connected Devices à This is the most
sought after area in IoT space, however if we observe closely; every big and
small player is betting on this. We see a lot of devices now a days that are
known as smart devices or the devices which have embedded microchips with the
capability to be connected with other devices. Producing these devices and
microchips require a huge Capex and the ROI window is comparatively high and
introduces many challenges in terms of competition with the other major
players.
Network Protocols à It provides the
backbone to IoT for a seamless interconnection between heterogeneous devices.
It may include new set of protocols and procedures for a secured, scalable and
uninterrupted communication between different entities of IoT i.e. devices,
semiconductor chips, wireless connection, wired connections, databases,
applications and operating systems etc. ROI is comparatively long term with a
maximum spent on research and development; however the returns are huge once
everything is in place.
Network Elements à This is an area which
is already flooded with a lot of network elements like routers, switches,
networks and other hardware components to run a network of devices. Just like
connected devices, this also requires lot of investment. The ROI if really
good, however it’s a long term investment and the returns are not quick.
Apps, Databases and Cloud à All the communications
between devices require three basic elements of human interaction with devices
i.e. Presentation Layer, Logic Layer and Data Layer as a minimum. Other layers
can be added as per the individual requirement. This is the area which is going
to be the core innovation hub where individual contribution will be more
important for the new ideas. People need to be extra cautious while designing
these applications along with the business logics and databases so that maximum
information can be collected with minimum user interactions and provide
concentrated insights into the information for an effective business decisions.
ROI is much faster for the worthy applications with a minimum Capex and Opex. The
current trend in this area is restricted to specific interactions with specific
devices that need a lot of improvements.
Business Intelligence and Support Desks
à When everything is in
place for IoT i.e. things are ready to be connected to the other things, we
need to provide a state of the art support service that is not limited to
devices only rather a mix of devices and IT support to run the comprehensive
IoT ecosystem. A traditional support system may include expertise in one area
only i.e. either on the devices (washing machines, fridges, Air-Conditioners
etc) or on the IT service (applications, networks, IT gadgets only). For IoT,
we need people who are experts in supporting smart device which is a
combination of devices embedded with a semiconductor chip or sensors that help
these devices to connect with other devices. People in the support area need to
be extra cautious as there will be a very thin line between the appliance’s IT and
hardware support. The support desk need a makeover and will need BI and Cloud
as integral part of their IT infrastructure. Analysis of data collected from
these devices and concluding meaningful information for business growth can be
another selling point for the support services. This is a very big opportunity
for a good business model. By investing very nominal money, huge ROI can be
achieved.
Everything comes with challenges,
so is IoT. Here are some of the challenges:
- Data proliferation due to huge number of sensors on almost every object on this planet.
- Breach of personal information if stored on these device sensors.
- Legal and regulatory requirements for devices that are located across geography and vary from one area to another.
- Technical standardisation across geography which is currently fragmented.
- Security is a major concern when this enormous data is flowing between devices using multiple protocols.
- Rapid innovations are also a challenge for the governing authorities.
- Interoperability between different set of devices.
- Testing of sensors in extreme conditions of these devices.
To conclude, there are immense
opportunities available in IoT space for all type of organizations. We can tap
the opportunities for future business growth by just not slapping sensors to
every object in this world but to only the designated devices that can provide
potential business value to the maximum stakeholders.
