Internet of Things - is it right for my enterprise?

It is one thing to read about Internet of Things (IoT) and get dazzled by the commercial opportunities it offers based on the stats like the number of connected devises there are in the world today. Or how more and more consumer products are getting connected to the "grid" to enable remote monitoring/ operations.  Despite all that, it is unclear as to how an enterprise would be able to make a strategic decision about benefits of an investment in IoT.  How would it know if their business model or product portfolio or customer base would gain from this investment? 








I am looking for any case studies, market research material that might help in this analysis.  Are there players (established industrial giants and/ or manufacturing heavy-hitters) who have adopted this technology and gained market share or helped make significant product improvements and /or branch out into services not possible before the advent of IoT.  Some notable companies come to mind in this space - GE, Siemens, Schneider.  Question is, what might be a possible play book that allowed these companies to evaluate these big IoT investments?  How did they make the leap - did they start with applying IoT to help monitor/ operate their own assets or did they create applications for their customer base enabling customers to remotely control assets like vehicles, conveyer belts, wind turbines, factory robots etc?  What was the path to success - leveraging connected devices for internal IoT applications or for external applications (like embedding sensors in heavy equipment sold to customers) so customers could outsource Preventative Maintenance.  And when does investing an a Cloud Platform such as what GE has done with Predix make sense?


Any and all guidance is really appreciated.
Surekha -

Comments

  1. Hello Surekha,

    When you have a moment, stop on by my LinkedIn profile and see the link I have to my Market Research Report on the IoT. It discusses the broad field of IoT from personal consumption (Smart Homes), business use (analytics), to municipal rollout of Smart Cities. The paper deals with the broad range that is the IoT, from business-to-business to business-to-consumer to government-to-consumer. If you’d like a pdf copy of the paper, please let me know.

    https://www.linkedin.com/in/jamesbaho/

    I am going to address three questions you posed here. The first is, “How would it know if their business model or product portfolio or customer base would gain from this investment?” There are several ways to answer this question. One would be a feature/benefit analysis, or similarly a cost-benefit analysis. Is there more upside to enabling devices or offering services? Answering that comes down to product road mapping. On the other hand, can a company afford not to make the investment?

    Why we are seeing this impressive growth is because companies are making the investment. This is due to the decreasing cost of sensors and processors and the inclusion of these parts in devices that previously went without. To address your question, “what might be a possible play book that allowed these companies to evaluate these big IoT investments?”, understand the confluence of circumstances that allowed for this: the Internet, wireless communications, sensors, and the programs to utilize these developments.

    What this comes down to is recognition of market capabilities. In light of these new capabilities, GE, Siemens, Caterpillar, Uptake and the likes, see an opportunity to invest in themselves. For example, GE’s Predix is described to its clients as a means of operating their business with less downtime and less cost. What this means is an increase of GE’s revenue will be based on maintenance contracts that will be steady revenue.

    Moving to your last question, “when does investing on a Cloud Platform such as what GE has done with Predix make sense?”, a recognizable similarity between all the players who entered into the IoT market is they have a product to support. GE created Predix, Caterpillar invested in Uptake, Microsoft created Azure. All of these companies took new products to existing markets, the very definition of product development.

    Market participants fall into a few categories:
    1) They have a legacy position in a field, like GE and Caterpillar, with billions of dollars of durable equipment in the field and have identified a new way to serve their clients through selling services,
    2) They created a product and are selling ongoing services, (think FitBit and Apple’s suite)
    3) They are selling a service as a 3rd party that supports a product.

    The business model concerning the IoT will be less to do with the product and more to do with the ongoing relationship of support services. The product will simply be the Trojan Horse, with the focus on residual income.

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