IoT is Real, and The Economics Are Pretty Compelling
- It wasn’t that long ago when the first smartphone came out, and we saw the pace of connected devices and associated mobile applications accelerate beyond what anyone could have imagined.
Shortly after that, something incredible happened, we reached the point where there were more connected devices than people on the planet. Since then, we’ve used this to measure the growth of the Internet of Things (IoT). Research predicts there will be as many as 50 to 100, and possibly even 200 billion connected devices by 2020.
Some businesses are already set up for IoT, like operators of large networks of devices such as self-service kiosks and vending machines. These devices are communicating information back to the enterprise and for those that aren’t, installing the proper hardware and software to do so is more cost efficient today than ever before. Any business that is going to scale is going to look for opportunities to automate its processes. We’ve seen history repeat itself from the Industrial Revolution to the automotive industry and more recently with Netflix automating the distribution of those little red envelopes. Netflix transformed their operations through the success of their streamlined mail business, becoming the premier provider of streamed digital media into the home. Anything that has successfully scaled has used automation effectively. Furthermore, we are seeing traditional retail and brick-and-mortar stores look for ways to combat increasing wages, and costs to maintain a physical environment. For many, that is through the implementation of kiosks and vending technology. We see this in hospitality with self-service ordering. Businesses are finding ways to automate through technology while improving the customer experience.
An operator needs a central place to monitor and manage their business—one-time, real-time.
The Perfect Storm
The reality of increasing wages and rising costs of real estate, combined with the decreasing cost of sensors, computation, and storage has created the perfect storm for our next technology revolution. As a result, automation through the implementation of IoT is becoming more desirable and achievable.
When taking a closer look at the specific drivers of these trends, it’s clear that the economics of IoT are very compelling. It is much less expense now to automate than before due to the decreasing costs of micro-electronics (examples: microcontrollers and sensors). The cost of data processing and computation is also reducing at a pace that we’ve never seen before.
Additionally, the ability to now process and persist data in the cloud has helped alleviate concerns about rapid growth, through the dynamic, on-demand, scaling nature of cloud infrastructure.
These technology drivers are a few of the many signs that IoT can help solve real business problems. Economic headwinds and more affordable technology have created the perfect storm for IoT to transform traditional physical environments through automation.
Automation is just the tip of the IoT iceberg
Once you’ve automated your operations, the next step is having the right set of management tools for your business. If you are operating a vast network of devices, having the ability to capture, store and process all the data from your devices and filter through the noise is critical. Taking a platform approach to IoT addresses many of the challenges operators face with Big Data. The key is to know which events are happening, and which are early warnings or indicators of system failure that could potentially cause significant problems in your business. Therefore, it is incredibly important to define the key performance indicators for your business so you can monitor and measure them to improve the overall health of your company. For example, an operator can automate diagnostic processes to remedy and fix issues to reduce failures from occurring. In this business model, the customer experience lives and dies at that endpoint. If the machine is down or displaying an error message in the middle of a transaction, that almost always results in a dissatisfied customer. So, predicting patterns, and preventing failures can dramatically improve the customer experience by keeping it consistent and reliable every time.
It’s imperative to have these management tools presented through a single, tightly integrated user experience, rather than through the implementation of many disparate and disconnected systems. An operator needs a central place to monitor and manage their business—one-time, real-time. Add to that a strong technology partner to help expose and address potential operational blind spots, and you’re set up for success.
Still not convinced IoT is real and an affordable investment?
We added some compelling information to this illustrated view of the top technology drivers for IoT in this infographic. It can help jump-start your IoT strategy. Check it out.