IoT#3: How to be an IoT Truffle Hog
We’ve covered the basics and the process we use with clients in building intelligent solutions in our series on the Internet of Things (IoT). We strongly believe that a customer-centric approach maintaining focus on the top jobs-to-be-done leveraging simple connected sensorics will bring about a revolution across industries. In this episode, we take a deeper look at why IoT should be part of your digital strategy and what the business aspects of building intelligence into your solutions are.
It would seem counter-intuitive to promote new things when we can all agree that we need to shift from a goods society to a good society. On average every German owns 10.000 things and Cisco predicts that 2,7% of all things will be connected by 2020...so there’s an intelligence gap to be filled. IoT contains the promise of externalizing decision making in a fast-paced world by creating greater experiences thus moving us from more to better.
With the pace of technological and digital change affecting all industries, small and large companies, public and private organisations, IoT represents a manageable first step to kickstart the journey into this new and connected world
MOTIVATION - THE BIG OL’ WHY
We work with companies on building both products, services, business models and digital strategies based on the Internet of Things. And IoT truly has implications and possibilities at at all levels or an organisation - let’s look at some of them.
As mentioned above and probably felt on a daily basis, the amount of competing solutions based on new technologies or digital platforms are increasing exponentially. Apps compete with large corporations on fulfilling subsets of user needs. Today, any organisation should focus on providing a WOW-experience as fast as possible and IoT, if applied intelligently, enables this. Technology used to be expensive and complicated so analysing whether solution A or B was the right one made a whole lotta sense - today you build both, test them and provide updates based on data. Furthermore, sensors bring in data that may be valuable to others than you and your users. Data-driven cross-industrial collaborations enabled by IoT are an exciting new business opportunity that will broaden the scope of your business strategy. Intelligent solutions allows you to change the competitive factors in a market instead of a race to the death based on specifications. Zuora helped Swann Security do just that.
Swann Security sold security cameras and service deals on top, primarily in the US market, but, with the help of Zoura, managed to move competition away from price or features to a broader concept of feeling secure...billed monthly. Swann realised that people really don’t want to buy a security camera and that Swann only interacted with customers when they had experienced a burglary. The need to stay in contact with customers on an ongoing basis to continuously fulfill their needs resulted in a connected platform with cameras, sensors incl. motion detection, unlocking mechanisms for doors and different applications on top with automated push notifications. The average home security provider locks customers into long-term deals averaging $40-70/month while Swann bills you a monthly subscription fee of $10...for a comparably greater solution that gets better as you use it. Swann are already experiencing lower customer churn and deeper insights into user needs that will allow them to further develop their home security platform, SwannOne.
Down the road this data-driven approach will allow Swann to solve problems before they occur which is a key motivation for building intelligence into your solutions. Unless you have Log Ladies (RIP, Catherine Coulson) or Spiderman on your team, data is needed to perform predictive analytics and pre-emptive actions. This will also allow you to understand what other problems your users have that you might help solve.
These general perspectives or strategic motivations for IoT also apply if you provide value through intermediaries/B2B - IoT may actually provide a way to unshackle yourself from a complex value chain with conflicting interests and many mouths to feed.
IIoT, IOU. Sincerely, IoT
Increasingly, companies are looking into how they can tap into existing infrastructures (physical or digital) to provide their solutions. And historically the industrial internet of things (IIoT) have been spearheading the movement towards a more intelligent smart world through early IIoT-applications such as RFiD-tagging of goods in logistics, production optimization through retrofitting of sensorics, automation in agriculture, building management systems etc. But production and infrastructure providers are increasingly awakening to the fact that they are the inevitable backbone of most IoT applications and could potentially stretch the value chain all the way into the everyday lives of consumers. As mentioned in the two previous articles on IoT, most devices work locally 1-1 (E.g. device-to-app) or 1-Many (E.g. Apple HomeKit controlling applications at home). Hereby, it fails to fulfill the greater promise of the smart eco-systems with lower energy consumption, more secure, predictable and less pricey solutions through a constant feedback loop between network and nodes.
The IoT-race is on and forward-thinking companies are leveraging smart physical objects to build data-driven services and business models on top. The best ones look to start ups and across industries for inspiration to build the next IoT-blockbuster (not the rental company!). The jury is still out with regards to the potential of IoT within business despite the ludicrous expectations in consumer and industrial markets. If IoT succeed in delivering savings, convenience and great user experiences over the next two years, it will, without a doubt, have a profound impact. Connectedness everywhere will feel natural only if it removes the bumps in the road. This is why we stress the importance of spending a great amount of time understanding the problem and figuring out who has the real incentive to solve it. Consumers may not be willing to pay and install a $200 connected humidity sensor but the insurance company may have a different business case.
Connectivity, the heart of IoT, will see a significant increase in performance through the expected widespread adoption of 5G by 2020 with speeds of up to 10Gbps (HD movie downloaded in 4 sec.). 5G will furthermore address the bottleneck problems of connectivity by moving higher frequencies normally used for satellites in combination with existing networks thus improving performance. Finally, the latency (time difference from requesting something to actually getting it) will improve immensely with 5G - actions will actually be performed by the flick of a switch.
Depending on the chosen wireless connectivity in an IoT-device, the power consumption primarily provided by batteries or through power outlets, is seriously affected. Some IoT-devices are used many times-a-day while others only once or twice on a weekly basis. Thus, developers have to consider optimal power source based on a deep understanding of desired user experiences. Battery or power sources is also affected by issues such as redundancy (if devices work as hubs thus needing to cope with single-node failures in the network instead of point-to-point nodes). But development within batteries, also driven by innovative companies such as Tesla, are responding to IoT-demands.
We are slowly moving from a mainly human-driven to a partly artificial intelligence (AI) -driven platform bridging digital and physical. As seen with Amazon Echo, AI can completely change the game within IoT and all major IoT-providers have it on their technology roadmap. As seen below, AI can either support and improve human action or completely automate specific tasks and it will in a few years time deliver autonomous context-aware services.
Security is still the Gordian Knot of IoT (and a major topic at all IoT-conferences). Less than 10% of consumers feel that IoT will have security built in and 75% mentions security as the biggest challenge for IoT despite 63% of respondents’ devices were found to be secure. IoT-security is a two-pronged sword where the connectedness allows for security breaches and updates or remediation. Legislation and industry organisations will have to address this as part of development efforts.
Thanks for staying along - please let us know if this might be interesting for you or your organisation.
We will continue our series on IoT with more articles exploring our own experience and applications from around the world that might inspire your venture into this new and connected world.