As early as 2014, Cisco was talking about the unprecedented economic potential of IoT. The technology’s value-creation opportunities, the company predicted, would represent $8 trillion within a decade.1 A 2015 McKinsey report reflected a similar scenario.2 Eight years later, though, the promise of IoT remains elusive in the non-manufacturing sector.
Even as the IoT market has grown, and McKinsey’s updated predictions tag specific industries (manufacturing and human-health) with the greatest opportunities for value creation,2 the realization of IoT’s economic potential persistently lags behind predictions.
In hindsight, multiple factors worked against the anticipated eager adoption of IoT: infrastructure, talent, change management, cybersecurity, and costs, to name a few.2 Much has changed in the world in the years since those initial predictions. Advancements and shifts in technology, process, and business models have at once eased old challenges and generated new ones.
For example, the transition of IoT from ON-premise environments to the cloud neatly supported IoT’s inherent needs — such as data storage, remote access, and integration — as well as expanded opportunities for innovation. But the move also introduced a host of new security and device-management challenges.
And despite enterprise data from cloud-managed IoT devices being more accessible to further integrate with existing enterprise systems, many IoT providers still struggled with the fundamental challenge of delivering compelling ROI in less than a year. This was due, in part, to their narrow focus on addressing a problem with an IoT capability — tracking asset locations, for instance, or collecting sensor data to monitor a lab refrigerator’s internal temperature.
Without a vision of the greater value that IoT could deliver, many IoT providers missed the opportunity to architect an end solution. Instead, they relied on the customer or channel partners to create that value, which resulted in highly customized, one-off solutions that were not repeatable.
Today, a newer generation of IoT vendors is taking on the mantle and exploring ways to bring consumer and enterprise technologies together as solutions. Certain use cases naturally play to IoT’s strengths and present opportunities to showcase its value in more holistic and sustainable ways, rather than with singular capabilities. Asset utilization is one of those use cases.
Leveraging an IoT value driver
Listed as one of Cisco’s primary value drivers for IoT (a projected $2.1 trillion in 2014), asset utilization continues to hold significant promise for those businesses that adopt and apply it effectively.
Consider this example: In the manufacturing industry, where large-scale efficiencies translate directly to the bottom line, lean processes and asset utilization are the tools of optimization. IoT adoption in this industry is high — a result of the role it plays in helping manufacturers understand and adjust the efficiency of equipment use across their environment.
Many non-manufacturing businesses, though, have little to no visibility into their overall equipment effectiveness— even though their asset inventory is diverse and much of the highest-value equipment is electrical.
Applying asset utilization to these other industries presents IoT providers with a new opportunity. As it turns out, merging electrical usage data (a legacy IoT capability) with advances in modern machine learning is proving to be a game changer.
Not only does the solution give companies the insight they need to utilize existing assets more efficiently, it fuels informed, data-driven decisions for space planning, procurement, and service maintenance — which also have an impact on the carbon footprint all along the supply chain.
A new mindset
With technology advancements helping to eclipse the old barriers to IoT adoption, and opportunities for use cases such as asset utilization to deliver ROI on a wide range of use cases, it would seem that IoT has been given a second chance to prove its worth. In order to ensure success this time around, though, IoT providers must live by five foundational tenets:
- Security: IoT device security is table stakes. Whether an IoT service provider owns the technology stack or has integrated their hardware into an existing software platform, end-to-end security cannot be an afterthought and must be integral to the overall solution architecture.
- Simplicity: Enabling enterprise reliability and security does not necessarily mean a product has to be complex. Solutions must be architected to make it simple for the service provider and “admin” end users to deploy, manage, and maintain without creating a burden for IT.
- Connectivity: Network infrastructure providers are significantly behind the times in supporting the management of IoT devices that are more sophisticated than a beaconing device. This has driven the proliferation of secondary networks that support vendor-specific IoT devices that enterprises will accept — provided the infrastructure is low-cost, secure, and managed by the service provider.
- Accessibility: Data isn’t information. To be useful, it requires context and, therefore, access to other data in other systems. In order to help customers maximize their ROI using data, IoT service providers must support ease of integration with existing enterprise systems to enable richer data contextualization.
- Innovation: IoT providers need to think outside the box in their approaches to solving basic IoT challenges. For instance, self-powering “smart plugs” that provide asset location, utilization, and condition data completely remove the need — and associated huge resource burden — to replace batteries or provide power sources for thousands of IoT devices across an enterprise.
A second chance
Ultimately, IoT enables a digitally connected universe with easily accessible and contextual data to deliver initial value. Use cases like asset utilization are rich in opportunity for IoT innovation. And therein lies the potential for IoT providers to drive a different outcome for IoT adoption this time around.
Creating repeatable solutions that offer ease of use and deliver immediate value for the customer will build the stickiness and repeatability that IoT has always struggled with. Delivering on that value has never been more critical to the realization — or embrace — of IoT’s promise.
About the author
As the CEO of WattIQ, Priya Vijayakumar brings over 15 years of experience creating and implementing global product strategy in Fortune 100, mid-cap, and startups to the table. She has successfully built and commercialized highly technical hardware and software product solutions through direct sales and channel partners. Priya was the vice president of product and marketing at two IoT startups, Cloudleaf & AeroScout Industrial (acquired by Stanley Black & Decker). Priya has also held multiple product and engineering leadership roles at GE Energy and Pratt & Whitney. She has a B.S. in Chemical Engineering from the University of Toronto and lives in San Francisco, California.