Although it’s not immediately obvious with all the talk of pilot projects and proofs of concept as businesses experiment with 'the art of the possible’, there is a great deal of large scale and serious build out of modern digital stacks fed by modern sensor data transmission, also known as the Internet of Things (IoT). Like most competitive business differentiators, strategically important work is being planned and executed in great secrecy, which can skew perceptions of what the landscape looks like.
An illustrative example of the importance and power of the various data streams created and consumed around the IoT is precision farming.
Smart farming equipment is relatively mature, with multiple data flows about all aspects of, as a specific example, planting seeds. Heavy equipment manufacturers are under pressure to not become ‘dumb iron’ and therefore a price pressured commodity.
To avoid losing out to seed manufacturers over control of data streams and aggregated intelligence ownership, equipment manufacturers must compete by not just supplying the relevant industrial internet hardware. They must aim to control the farmer’s user interface and experience by providing the best data flows through continuous digital innovation.
Providing farmers with real time planting intelligence and best practice is the center of equipment manufacturers market leadership and survival, and data is the currency.
It’s a commercial battle: whoever is able to provide the most useful, intuitive and intelligent assistance to the farmer wins their trust, business…and their data, which can be aggregated and resold.
From a service provider perspective, the Internet of Things currently has two main dimensions, both of which are attributes of larger battles for digital dominance.
The first dimension is the Machine to Machine (M2M) industrial internet, which evolved from heavy equipment telemetrics (the measurement and transmission of data by wire, radio, or other means from remote sources to receiving stations for recording and analysis) and has matured and grown on a linear path alongside 'traditional' enterprise IT systems for the last fifteen years. Examples of this are ‘time to failure’ monitoring of all types of rotating heavy equipment, and data flows into and from ERP and other enterprise software.
The other, newer dimension is the explosion of product innovation enabled by new sensor developments and 'big data’, enabling data flows from ‘born digital’ devices from and to physical ’things' of all sizes to modern digital backbones.
Modern ‘things’ of all types are increasingly manufactured with sensors embedded in them, from tires to consumer products, and have associated API’s to send and receive data. These sets of data flows are rapidly transforming society as a subset of digital business.
There is an increasingly complex services market growing up around these two dimensions of IoT The services sector has several ‘born IoT’ specialists, multiple global IT firms expanding into IoT services, integration suppliers who have deep competencies in the industrial internet, and many more services firms with substantial multipurpose IoT departments in anticipation of increases in business demand.
We evaluated a representative 18 service providers in our IoT Blueprint research. In the process, we placed a bias on innovation, particularly around the“newer dimension” of IoT as described above. We also looked at many other contenders in the space but found inadequate activity to justify inclusion for now.
While the industrial internet is an industry in itself around all types of increasingly sophisticated data flows from manufacturing, heavy equipment, aircraft and supply chains, it is largely rooted in past technologies. Innovation for the industrial sector is around smart cars, buildings and infrastructure, which are all large scale investment projects, and are areas where there is a thriving, mature business for many of the enterprise suppliers of services.
Where things get really interesting around IoT (and where there is also substantial hype, red herrings and misunderstanding) is innovation across ‘born digital’ product and services lifecycles from inception to post sales support.
While there is hugely entrepreneurial innovation and experimentation with all the new ‘things’ made possible by sensors, connectivity and data, interoperability and integration are critical to avoid standalone solutions, which won’t work as contributing components of a larger digital framework. Revisiting the precision farming example above, the industrial internet underpinnings of a piece of agricultural equipment must be augmented with ever more innovative, newer dimensions of access and analysis of data to remain competitive.
The farmer may also choose to leverage additional ‘standalone’ IoT products and supporting mobile apps in their arsenal of digital intelligent aids, but these will be of limited and narrow use unless they can flow their data to a single digital backbone or core. This provides a more complete and sophisticated view of real time activities, with real time contextual intelligent assistance to the operator of the equipment.
Viewing the IoT services market from the client perspective, anxieties are high over security concerns and standards. The technology vendor partner ecosphere is fluid and there are concerns that placing big bets on complex integrated systems could cause headaches as technology relationships and standards evolve, resulting in disruption and forced redesign of systems created to be load bearing and mission critical. These anxieties are tempered by the reality that the world is changing fast and the fight for continued relevance in marketplaces requires being on top of customer facing digital strategies. High end-to-end security competency to protect exposed IoT data flows are table stakes to give clients the courage to embark on work with vendors.
IoT is a buyers market…for now…
Today IoT services is a buyers market as prospects and existing clients in other areas scope out the best size, specializations, partnerships and geographic location fit for their needs. There is a marked division between passive services providers with strong skillsets who are waiting to be told what to deliver and when, and the more innovate entities who will partner with their clients to innovate, perform design thinking together, and often to share risks and rewards. It is the latter who are likely to evolve to be top of a sellers market as reputations and track records are built.
The fate of being perceived as a lowest cost commodity delivery supplier is a threat to some ‘delivery only’ IoT partners, who share a similar danger with the farming equipment manufacturers who fail to evolve and innovate in order to remain relevant to their market.