Apr 192016
 
Curt Hall

The Internet of Things (IoT) promises to cause disruption in almost every industry. Companies need to examine how they can take advantage of connected products and services and plan for the significantly increased data workloads that will likely come with the deployment of sensor-enabled products. However, an expected surge in product innovation also means that companies should carefully consider how they will deal with the potential rise of new, more agile competitors whose business models will be based primarily on IoT products and services. Here are some points about the IoT I’ve been discussing with colleagues that organizations may want to consider.

Bigger, Faster, Varied Data and New Data Management Practices

The expected myriad of IoT connected devices and services will result in a significant increase in the amount of data generated. Organizations will have to deal with that data. In addition to being more voluminous, data from IoT applications will be faster (i.e., real-time, streaming) and varied. This will drive the demand for personnel experienced with new analytical tools and techniques — particularly in sensor data management and analysis and mobile implementation and networking skills.

The IoT is already having a big impact on the data management and BI industry and is driving the development and application of advanced data management and analysis technologies. This includes data management file systems like Hadoop and Yarn, NoSQL, graph and multi-model databases, and so-called “NewSQL” databases like Splice Machine (which basically implements an SQL database on top of Hadoop). The IoT is also advancing the development and adoption of real-time analytics like event processing, business rules engines (BREs), streaming analytics, machine learning (ML), and cognitive systems (e.g., IBM Watson).

Rapid Product Innovation and Industry Disruption

Once IoT adoption gets underway, it’s expected to lead to a huge surge in product innovation, including new, game-changing products with the potential to dramatically upset existing lines of business and even entire industries. Accelerated IoT innovation may also result in an increase in intellectual property issues and confrontation among competitors.

The IoT will also upset customer service models by driving companies to adopt real-time or just-in-time service practices driven by the “always-on” nature of connected products and heightened customer expectations. This will push companies to implement remote product monitoring facilities and, in some industries, capabilities for supporting condition-based maintenance and predictive maintenance (see “Predictive Maintenance Initiatives Are Accelerating“). In fact, we are already seeing cutting-edge companies in aerospace, manufacturing, transportation, and consumer appliances, and others implement such technologies and practices.

Some industries will experience dramatic shakeups. In addition to the upsets we are already seeing in the taxi and hospitality services (caused by the likes of Uber, Lyft, AirBnB, etc.), the automobile, insurance (auto as well as home/business), trucking, and delivery and transportation (in general) are also set to undergo major changes resulting from the widespread deployment of sensor-enabled devices and automated-driving vehicles.

For instance, consider the possible impact that self-driving vehicles could have on automobile ownership trends and insurance. If cars are going to be self-driving, where is the thrill in owning one? Especially when you can just order up a car via your mobile app and it will arrive at your house or business, take you to where you are going, and bring you back. No need to concern yourself with the immediate problem of parking or the longer-term hassle of maintaining a vehicle. For that matter, how do you market a self-driving sports car? Today’s ads tend to show happy people experiencing the thrill of driving fast along some winding, beautiful country or coastal road. (I’m not sold on self-driving vehicles. To me, they sound boring, because I really enjoy driving a responsive car on a nice road.)

Also, if widespread use of self-driving cars results in fewer vehicles actually on the road and ends up significantly reducing vehicle collisions, how will this impact auto insurance industry business models?

The auto manufacturers are not sitting still when it comes to adapting to meet the changes that the IoT will bring. One of the most dramatic examples is GM’s recent investment of US $500 million in Lyft (as reported in the New York Times). As part of the investment, GM and Lyft will collaborate to create an on-demand network of self-driving cars. GM and Lyft are also planning a series of short-term car rental hubs across the US.

Still, there remain concerns that some companies — due to the inflexibility of their business models, IT architectures, and processes — may get caught by surprise with the rapid changes fostered by the IoT if they do not reinvent themselves in time. Consequently, companies should start planning now for how they can take advantage of connected products and services as well any possible direct and indirect consequences resulting from the application of IoT technologies in their industry. Even toy-maker Mattel has started reinventing itself with its new connected Barbie doll.

Finally, where do you see the disruptive potential of the IoT in your industry? Is it real or overblown? You can email me at chall@cutter.com or call +1 510 356 7299 with your comments.

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Curt Hall

Curt Hall is a Senior Consultant with Cutter Consortium's Data Insight & Social BI and Business & Enterprise Architecture practices. His expertise includes BI, data warehousing, data mining, and other analytical technologies and products.

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