By Benoit Delalande, Oracle Insight
60% of enterprise Internet of Things (IoT) initiatives are stuck at the proof-of-concept phase, and only 15% were considered successful by business decision-makers, according to a recent survey by Cisco. The situation in the consumer IoT market is similar, with very few connected products delivering measurable benefits for end users. A 2014 research report by Nielsen stated that “41% of users strongly feel that smart products have just been gimmicky.”
The reality is that, despite predictions made by analysts, IoT has failed to create enough value to justify the investment required to conceive, deploy, and manage billions of connected devices and their associated data. But management consulting firms such as BCG and Bain are optimistic about IoT’s potential value. Recent acquisitions in the IoT sector demonstrate that technology giants believe and invest in IoT.
So, how can we make reality live up to the hype? It’s time to rethink the way we deliver and use IoT in the corporate world.
Here are three disruptive approaches to start with:
1. Forget use cases. Many specialists advise their enterprise IoT customers to focus on specific use cases to maximize the chances of success of their project. The “start small, think big” strategy has been repeated many times by companies including Dell and SAP. This focus limits the potential value of projects. With predictable scenarios, IoT-enabled systems can only deliver predictable results. The insights generated by an IoT solution designed around a specific workflow will always be limited to the insights imagined by the people who created that storyline.
IoT needs to be freed from specific use cases. Furthermore, it needs the creativity of third-party developers who can create value and develop an ecosystem around IoT products and services. This is exactly what Apple did with the App Store for the iPhone in 2008. Instead of focusing on voice, text, and browsing capabilities, the company created a generic mobility platform whose functions could be extended endlessly by third-party applications. The mobile platform increased the value of the iPhone beyond any competitive solution, and far beyond what Apple could have done on their own.
IoT needs a similar generic platform that companies could deploy massively to answer their short-term IoT requirements, and that could be extended by opening it up to third parties. A number of companies are currently attempting to create generic IoT platforms and establish them as the de-facto solution for simplifying IoT development. Whether any of them will be successful remains to be seen, but in this area, it’s a matter of if – not when.
2. Give away corporate data. Internet consumers today give up their privacy and share personal information with tech companies in exchange for free access to tools such as email, online storage, and social networking. Those companies create value by monetizing their customers’ personal data to brands through online advertising networks. Would a similar model work with IoT?
In fact, companies already sell internal corporate data collected through their information systems, the sensors deployed in their factories, and the connected devices deployed in their vehicles. In exchange, they receive benefits such as better software discounts from suppliers and strategic recommendations from consultants. Customer-supplier contracts already leverage performance-based pricing models using key performance indicators generated by collected data. (I give you my solution for free and you give me 50% of all savings you generate by using it.)
The more data you collect internally, the more leverage you will have with suppliers and partners to negotiate your contracts and pricing models. Chief data officers should look at leveraging IoT monetization marketplaces to generate new revenue streams. Samsung ARTIK and Dawex are already experimenting with IoT data marketplace monetization models.
The insights generated from an IoT solution designed around a specific workflow will always be limited to the insights imagined by the people who created that storyline.”
3. Support an IoT search engine. In 2015, McKinsey reported that only 1% of the data of 30,000 sensors embedded in an oil rig are examined. This means 99% of data is collected but unreported, lost somewhere in the data flow between the oil rig and a centralized reporting dashboard. How can we make use of that 99% of data, and give access to people who can leverage and monetize it?
Interestingly, 30 years ago, we faced the same issue with the Internet. Information was available online but not easily accessible. Automated search engines solved that pain point by crawling through and indexing all of the public information on the Internet, and giving people instant access to the information they were looking for. The IoT is similar. As long as we only access the 1% of data displayed in a consolidated management dashboard, the value we can extract as business owners will be limited and constrained. We need technology to instantly access, crawl through, search, sort, and index the remaining 99% of IoT data.
Google’s mission statement for the Internet was to “organize the world’s information and make it universally accessible and useful.” Today, we need someone to become the Google of IoT. We need an IoT search engine that would leverage artificial intelligence to analyze and monetize the vast amount of unused information. For example, a developer creating an application for smart cities could pay to access qualified data that would make the app more valuable to customers – data about things like pollution, traffic, lighting, and noise.
To make IoT truly valuable to companies, we need less focus on pre-identified use cases, data liberated from the privacy barriers of the corporate world and shared with external developers through online data marketplaces, and a generic IoT search mechanism. With these three advancements, the world would see the true power of IoT unleashed.
Photography by Julian Santacruz