The Internet of Things (IoT) overtook big data as the most hyped technology in 2014. Experts predict that IoT will be a potent and leading business technology-enabler of the next decade. According to an independent research firm, technology and services revenue from IoT is expected to expand from US$1.3 trillion in 2013 to US$3.04 trillion in 2020 with a compound annual growth rate of 13%.
IoE will have major implications for both business-to-business (B2B) and business-to-consumer (B2C) enterprises; along with having an overwhelming impact on their IT strategies. Traditional IT infrastructure will buckle under increasing demand for storage management and network capacity from new IoT deployments. Existing datacenters and network architecture will have to be reengineered to handle the exponential growth in connected devices coupled with sharp surge in IoT data. Enterprises will upgrade their IT infrastructure in the light of creating business value from IoT, yet further changes may be needed as the IoT ecosystem becomes increasingly entwined with analytics and cloud initiatives. At the same time, addressing security and privacy concerns may require enterprises to adopt new IoT security policies.
IoT is making rapid inroad into enterprises
The falling costs of data storage and computing power, increase in broadband penetration and rapid proliferation of connected devices have all contributed to unfolding of an IoT revolution. By the end of the decade, 30 billion connected devices will exist globally. Further, with availability of low-cost wireless sensors, the cost of adding connectivity to a device has now fallen to less than US$5.
Intrigued by the implications of the burgeoning IoT market, enterprises are exploring the opportunities of connecting their existing products to the internet. 74% of C-level executives in medium-to-large businesses expect IoT to play a large role in their business’s products within just three years.
The emerging IoT applications in enterprises are focussed on business processes such as remote maintenance of industrial machinery, supply-chain optimization, customer engagement, security and infrastructure management.
Enterprises are exploring how IoT can generate not only operational efficiencies but also new revenue streams. In cars, for example, on-board diagnostics ports that monitor driving patterns are paving way for pay-as-you-drive insurance products. Remote monitoring is enabling health care companies to offer a wider range of home-based care services.
Enterprises need to bolster their IT infrastructure for IoT
Although the upside represented by the IoT remains highly promising — with use cases as
diverse as home automation services and logistics tracking — enterprises need to revamp their IT infrastructure if IoT is to live up to industry ambitions.
IoT implementations are complex – involving multiple devices, integration with enterprise systems and long-term support. Also, security continues to be one of the top concerns of enterprises implementing IoT solutions.
Data deluge will compel enterprises to revisit their datacenter strategies
44 zettabytes of content will be created by everything with an IP address by 2020. Consequently, there will be a need for storing and managing such large quantities of IoT data which in turn, will increase the workloads on datacenters. By 2017, 90% of datacenter and enterprise systems management are estimated to adopt new business models to manage connected devices and non-traditional infrastructure.
Automation and scalability will be of paramount importance while deploying and managing connected devices. IT infrastructure must facilitate provisioning of new devices, without disrupting existing systems. The sheer volume of data will drive migration to cloud-based datacenters as moving data efficiently to the cloud and extracting insights will become crucial. Seamless integration with cloud-based architectures will be critical in streamlining IoT rollouts in enterprises.
Fast, agile networks will be the way forward for enterprises
Over 10,000 devices are estimated to be connected to the corporate network every minute globally by 2020. IoT devices have different usage characteristics than those of the typical employee using a PC from a desk. Some of these devices — especially video-based, have extremely heavy data requirements.
IT network management teams will have to review their network configurations to handle the performance expectations and security requirements of endpoint IoT devices. Given that majority of IoT devices will run over IP, corporate networks may face additional burden. Furthermore, the data generated by these devices will be indispensable. Fast and agile networks will be imperative for real-time analysis of IoT data.
Emergence of analytics as the core value proposition
As wireless sensors invade physical environment, vast amounts of data will be generated. A wide range of data-driven business process improvements can be implemented across industries by applying analytics to this data. In the manufacturing industry, real-time tracking of post-sale service or warranties (using machine-to-machine sensors) can be used to identify malfunctions and warranty issues. Real-time promotions can be sent by analyzing sensor data and customers’ buying preferences.
Increased demand for real-time analytics will drive enterprises to adopt interoperable and standardized platforms across diverse industries. As enterprises become more IT savvy, they will begin to develop new products and offerings by partnering with IT vendors who have expertise in this domain. Developing intelligent edge devices (that manage and process data themselves) will drive innovation in analytics and enable enterprises to realize incremental revenues.
Data security and privacy will be the overarching theme
The major challenge for enterprises implementing IoT solutions will be security and privacy of information shared across a wide range of smart devices, including televisions, automobiles and household and office appliances. Furthermore, users will expect a uniform experience even when they access systems via multiple devices.
IT teams will need to equip themselves with multiple methods of authenticating people and devices getting into the networks. Considering how IoT is unfolding, IT teams will need to have effective tools to encrypt data transferred through the network and perform remote IT support securely. IT will be required to create technology architecture around the IoT framework while ensuring platform interoperability.
The road ahead
Given the seismic shifts over the past years in harnessing digital technologies (social media, cloud, analytics and mobility) to improve the bottom line, a similar shift is underway for the IoT. As sensors make way through the home and at work, it’s easy to imagine a hyper connected world with all people, devices communicating with each other.
The cloud represents a bright spot for enterprises in their IoT journey, enabling them to get up and running more quickly, easily and cost-effectively. Cloud-based analytic capabilities will play a pivotal role in facilitating enterprises to adopt a service broker model in today’s hybrid IT environments.
Looking ahead, IoT will break out of existing silos and embrace vendor and platform-agnostic standards. Furthermore, the shift towards open IoT platforms and analytic services will provide a significant opportunity to address IT skills shortages in high-valued data scientists and integration experts.?
As enterprises continue to redefine their business models by integrating IoT across multiple levels of the business, the boundary between internal processes and external products and services will become more blurred. For example, data from sensors are used to monitor machines remotely and thus, offer improved customer service through predictive maintenance. However, the divide between internal and external (customer-facing) processes begins to fade when engineers use this machine data to innovate and design the next generation of products.
It will be interesting to see how enterprises respond to the mainstream adoption of connected devices and work towards unleashing the potential that IoT has to offer.