We are embarking
on a new technological journey that will fundamentally change forever the
economy, society and the way that we live.
The Internet of Things (IoT) is a world where up to 50 billion things
(or devices) will be connected to the Internet by 2020; or, the equivalent of 6
devices for every person on the planet.
The
clear winners in this revolution will be those companies that, not only embrace
the Internet of Things, but use it to transform their businesses. Those winning companies will be the ones that
integrate IoT into their operations, products and customer interactions to
create new business models and sources of value. In fact, McKinsey estimates that there could
be as much as $11 trillion per year by 2025 in new economic value created by
adopting IoT.
Businesses
are beginning to completely re-design their processes, operations and business
models to benefit from this new era. We
are already starting to see the emergence of smart cities, connected utilities,
connected railways, connected factories, connected cars, and even connected
mines, to name but a few. All industries
are looking to IoT as a breakthrough technology to help them optimize their
business, enter new markets and enhance their relationship with their
customers. This is why industry
analysts, like IDC, estimate that businesses will spend up to $20 trillion over
the next four years to realize the promise of the Internet of Things.
The dawn of the
IoT revolution may have begun but it will still be some time before its
transformational powers will be fully felt.
There are a number of technical, business, regulatory and perception
obstacles that must first be overcome.
We are still very much in the early days of the IoT revolution with many
companies knowing that they need to do something but not sure, what or how. A study by Harvard Business Review and
Verizon found that less than ten percent of enterprises had deployed IoT
initiatives. And, of that small minority
only 56 percent of those had an IoT strategy.
What does that say for the 90 percent of companies who have yet to
implement IoT initiatives?
Recent Cisco
research of enterprise IT and business decision makers revealed that their top
3 challenges with implementing IoT initiatives in their businesses were: 1)
security of business data; 2) standardization of IoT infrastructure and
compatibility with business systems; and, 3) cost of implementation. The IoT supplier market is currently very
fragmented with a multitude of big and small companies providing single pieces
of the IoT implementation – devices, application, point solutions, different
platforms, etc. Hence, it is currently
challenged to meet these demanding customer needs.
We believe that
Service Providers are well positioned to unlock the true value of IoT for
business and public sector customers. Our
recent white paper, “How Service Providers Can Help Businesses to Realize
the Promise of the IoT Revolution,” describes how SPs are well suited to deliver on these
customer needs and the strategic and operational decisions that they need to
make to build a viable IoT business. In
particular, we address a number of key questions that service providers need to
answer to build and run a successful IoT business:
- What are the key challenges that businesses have with IoT and how are SPs best positioned to help them?
- How can SPs add further value to their connectivity offerings?
- What are the best opportunities more value and move up the IoT delivery stack from connectivity?
- What are the potential economics and business models of these new solutions and services and how can SPs best extract value?
