Seizing the IoT Ecosystem Opportunity
The number of devices on the market with internet connectivity currently is staggering, and not set to slow down any time soon
In fact, industry experts predict that, by 2021, there will be between 27 and 40 billion interconnected devices making up the Internet of Things (IoT).
While a large proportion of these devices benefit and enhance our personal lives, this rapid expansion is also giving rise to new opportunities in the business world. Being able to share information openly has the potential to significantly benefit and improve countless industries.
However, while this expansion is exciting, it also presents a number of challenges for businesses, including matching scalability with appropriate platform technology and how communities of information suppliers and consumers can collaborate in ecosystems. So, how can everyone seize this IoT opportunity?
The four broad types of ecosystem are classified by the operating state (open or closed) and the complexity of interconnected devices (simple or hyper-connected).
While all four are distinct, each one has its own business value.
Not all data can be considered open and suitable for public consumption, however. While sharing global temperature sensor information is in the public interest, a vehicle’s specific location from ANPR cameras is perhaps not. One organisation that encourages and promotes the safe, open, exchange of information in communities of interest is The Open Data Institute (ODI), set up by Sir Tim Berners-Lee in 2012. This independent, not-for-profit organisation works with companies and governments to build an open, trustworthy data ecosystem where people can make better decisions using data.
Currently, there is a rise in the number of organisations collaborating to provide new services to consumers, such as showing available electric car charging points on a map to make their lives easier. There are numerous new commercial ventures for aggregating and analysing large volumes of data ranging across healthcare, smart cities, agriculture, logistics, utilities and smart buildings, to name a few. In fact, with so many devices expected to be installed in the next few years, IoT ecosystems will undoubtedly touch almost every industry.
Beyond the essentials, IoT platforms are being built to include a range of additional services that support the ecosystem. For example, blockchain for authentication, advanced analytics for trend analysis and machine learning for early event warning detection.
Simple, connected ecosystems of devices can currently communicate with each other directly. However, as the volume of devices grows, an enabling platform will be needed to support this ever-scaling ecosystem. One example of this is YouTube; the platform, which supports a large ecosystem, has directly influenced the exponential growth of video sharing. So, how do other companies mirror this recipe for success when it comes to scalability?
One method is implementing cloud-based microservice architectures, which provide the flexibility to expand rapidly and the modularity to add to new standards, interfaces and devices. However, this approach comes with its own issues, which need to be recognised and overcome.
One of these ever-present challenges is security. IoT ecosystems are particularly open to threats and the attack surface is potentially very large due to the huge number of devices which can now be connected. To overcome this, scalable solutions, using techniques such as predictive analytics, are needed to protect users and their data.
In addition, the human element has to be carefully considered. Processes, tools and training must be developed by humans, for humans. Conversely, automation and artificial intelligence is needed to support the machines. Going back to our original example, YouTube’s ability to automatically process video for copyright violations is critical, as no army of humans could ever watch the 300 hours per minute of new content being uploaded…even if they tried.
Finally, when organisations partner with each other to produce and consume data, they need a set of enabling services. The key to a successful proprietary ecosystem depends on the partners receiving a great experience from the platform. This should allow both parties to manage their commercial arrangements easily, monitor the performance of their services effectively and adapt quickly as their business models evolve.
Realising the potential of IoT ecosystems
Research by the TM Forum has concluded that there are two main business models: participating in vertical market solutions and providing IoT ecosystem platforms. A good example of a vertical is the global connected car market, that is forecast to exceed $200bn by 2021. This starts with in-vehicle telemetry being shared with manufacturers for maintenance and quality improvement. The next evolution includes fleet management services, public safety and smart roads.
There are similarly a growing number of providers in the proprietary ecosystem space. An interesting example is the use of vehicle telemetry, dash camera footage, driver statistics, geographic information and traffic information to manage the cost of insurance for home delivery services. The use of artificial intelligence is able to spot trends in accidents that is leading to a number of actions to reduce the root causes of claims and also to improve customer experience. With so many companies taking the lead in their industries, there is very high potential for what can be achieved.
The next step
Communities of data consumers and producers are already collaborating and using enabling platforms that manage the security, scalability and management challenges to turn IoT into viable business models. Vertical markets have similarly huge growth prospects, as do the service providers that support IoT communities.
The current trend in hyper-connectivity is giving rise to new uses for enabling technologies such as machine intelligence, to help businesses sift through data, derive valuable insights and benefit the societies of the future.
The rapid expansion of devices on the internet is one of the most profound changes that digital technology is having on human society in our lifetimes. While the topic is extensive, standing back at looking at IoT from an ecosystem perspective helps us to see the wood for the trees.
First published on TechNative in April 2019