Beyond the surface hype, IoT is critical to business – part one
Sukamal Banerjee
The Internet of Things (IoT) has been in the news for its hype value. We’ve all heard about your alarm clock communicating with your coffee machine to have hot coffee ready for you when you step into the kitchen or your refrigerator communicating your grocery needs to the local grocer. Other examples include your mobile-controlled thermostat, your fitness trackers, drone cameras and even Uber cabs.
These are all great examples but look a little deeper and it’s clear that IoT is much, much more: it’s critical to business. And that is where it is going to be a true game changer. As GE chief executive Jeff Immelt cautioned participants at the recent Minds + Machines summit, “If you went to bed last night as an industrial company, you’re going to wake up this morning as a software and analytics company.”
The picture starts to get really dramatic when you take a long hard look at the impact IoT can and will have at our workplaces – what’s known as the Industrial Internet or Enterprise IoT.
“This is where the Industrial Revolution meets the Internet Revolution,” Richard Mark Soley, the executive director of the Industrial Internet Consortium has said. According to McKinsey, business-to-business applications will account for nearly 70% of the value from IoT in the next ten years – that’s nearly $5 trillion of an estimated economic value of $11.1 trillion a year.
Imagine our factories within this new landscape. What do you see? Sensors, artificial intelligence, robotics, computer simulation, high speed networks? For sure. But look again – beyond the glitz of new technology. Look at it with the lens of business value. Do you see reduction in costs? Better efficiency? Optimal resource utilisation? Real-time analytics? Increased market reach? Greater product customisation? All of the above? Yes. That is where the real thrill lies. And it’s real.
According to a recent study by Business Insider Intelligence, the spend on enterprise IoT products and services will grow to $255 billion a year by 2019 – that’s a compounded annual growth rate of 40%. Clearly, this level of interest is not because this is a phenomenal advancement in technology in itself. It is because it promises a phenomenal advancement in business.
Businesses are quickly recognising that IoT might be the key to remaining competitive. In my next blog post I will outline how IoT is already being put into action by some forward-thinking businesses, and how it will support organisations in the future.