Devices, Data and Decisions
The Internet of Things is a fast growing platform of connected devices, machines and cloud technology, which is helping businesses better manage process, machines and decision making. But what is the Internet of Things (IoT)? I like to describe it as, 'Devices connected to the internet to be used for the collection and analysis of data for the automation or control of a process.' Yet the term "Internet of Things" did not come about recently. Twenty years ago, a group of MIT professors described a world where "things" are connected, sharing data. These devices will produce data that provides organizations insights that were previously out of reach. Insights facilitated by collecting and analyzing the data from connected devices, is what the Internet of Things is all about.
What is causing the recent, rapid growth? Today the Internet of Things is at a point of taking off very, very fast. Consider the following:
- Hardware costs are coming down. The costs of IoT components such as GPS sensors and accelerometers have fallen dramatically over the last few years and are continuing to go down in cost.
- Technology advances are continuing increase to the point where tiny microchips are now capable of running more advanced software than ever.
- The B2B opportunity looks to be substantial. Consumer applications attract quite a bit of attention in the news but McKinsey Global Institute estimates that B2B uses can generate nearly 70 percent of potential value enabled by IoT.
- Software advances are continuing to increase. Software developers are putting high-level data analysis capabilities into the hands of companies around the globe.
- Connectivity is proliferating. IoT solutions used to be limited to wired or wireless local area network connections but that is no longer the case. Advanced cellular networks are providing additional capacity and embracing the Internet of Things.
- Cloud technology is becoming affordable and more available. With the growth of cloud services like AWS ad Azure, cloud storage and processing power are becoming more affordable and available, expanding the capability of all sizes of businesses to analyze large amounts of data.
The Internet of Things has the potential to create an economic impact of as much as $11.1 trillion per year by 2025, according to McKinsey Global Institute.
Cloud computing is the foundation of the growth of IoT. It provides a scalable data collection, processing, and analysis platform, which is accessible from anywhere. Cloud solutions provide the ability to process significant amounts of data, store that data, and then apply rules and structure to it for consumption. The amount of money IT will spend on cloud services in 2016 is $114 billion, and that will grow to $216 billion in the year 2020, according to a report released by Gartner1. The interest in and growth of IoT will only increase over the next few years.
Is There Value?
The Internet of Things is not complicated and is very practical; Technology that can generate a return on investment and drive efficiencies and insights for organizations that learn how to apply it to their processes. The real value of IoT is in the data you collect from those devices, and the business insights this data provides.
Every hour of every day, these connected devices and machines are producing large amounts of information. By collecting this data in the cloud, connecting it to back-end systems, organizations can optimize business processes, make informed decisions, identify new revenue opportunities, and understand and predict customer and partner behaviors in ways they could not do before.
IoT devices such as Amazon Dash buttons, Amazon Echo/Alexa, and mobile apps like Fandango, Papa John's, and Ikea, are becoming more important to consumers by being positioned within a home or office to take part in commerce at a moment's notice.
Data, Data, Data
Data is mission-critical to growing your business and it comes in, in many different forms and by many different pathways. Instead of being overwhelmed when thinking about the massive amounts of data produced by billions of devices, stop to think about how one part, one small part, of your business, producing one set of data about your customers, your processes, sales, or inventory could provide value to your organization.
The first challenge to address is the creation of a framework to admit and process this data. Cloud technology can automate the validation and acceptance of the data coming from all of the devices across your organization. The next set of challenges will be connecting Cloud to ERP/CRM and BI so you can take advantage of the data and process it to glean information to help make informed decisions, better serve customers and gain efficiencies across your organizations.
The internet of things is less about the things, less about the internet. It is all about the data.
In my next post in the Internet of Things we will look at a few practical applications of IoT within business verticals.
