In business, separating hype from reality can be difficult. It seems every new product, service offering, and technology arrives on the breathless proclamations of salespeople, marketers, and even analysts that this new thing will not only solve your problems but also transform – or, at the very least, disrupt – the industry or marketplace to which it is being introduced.
With the Internet of Things, it’s no different, except by degree. Promises of unprecedented insight into everything from consumer appliances to industrial equipment and supply chains abound, accompanied by predictions of massive efficiencies and cost savings, as well as reinvention of existing industries and the creation of new ones.
And even if it seems the hype machine is stuck in overdrive, the IoT has a solution for that as well: connected sensors that deliver a steady stream of information and real-time insight into machine performance.
Data Informed spoke with Ashwin Kotian, Vice President, Product Management, at RF Code, about the Internet of Things, hype versus reality, and how companies are actually using and benefiting from the IoT today.
Data Informed: We have been hearing so much lately about the Internet of Things. It’s been called “the next big thing,” “a revolution,” “a new paradigm for business.” How much of this is hype and how much is a reasonable reflection of the IoT’s potential?
Ashwin Kotian: Some is hype, some is founded in truth. The IoT has definitely arrived in some industries, and this can be seen by the positive impact connected devices and sensors are having within some of these companies. Process-centric organizations, such as IT, manufacturing, healthcare, supply chain logistics, industrial, etc., stand to gain the most business benefits from the IoT, particularly around gaining operational efficiencies and reducing costs.
Every new technology comes with a certain amount of hyperbole. Why does it seem that this is much greater than usual with the IoT?
Ashwin Kotian: In many respects, the IoT market is similar to the Internet of the 1990s. The early Internet was an untapped technology that radically transformed society. Similarly, the IoT is exciting to both observe and to be a part of. With the Internet, the conversation was about connecting with people. With the IoT, the focus is on connecting things in a way that significantly impacts people’s daily lives. Arguably, there are a lot of “things” out there in the material world compared to people that use them, and this is probably one reason why there is a lot more perceived exaggeration associated with the IoT today.
Last year, Gartner claimed that the Internet of Things had overtaken big data as the industry’s most over-hyped subject. However, it should be noted that some of the world’s largest IT organizations have not only embraced the IoT in their data centers, but are continuing to aggressively expand their deployment of IoT technology over the coming years. This is not just a commitment on their part to pursue innovation and thought leadership, it is a strong sign that the IT ecosystem is maturing as the adoption of the IoT begins to drive real business value.
This maturity will eventually reach a point where corporate systems – machinery, IT, buildings – all will use sensors in some shape or form and will become more intelligent about themselves and the environment surrounding them. As these deployments of the IoT proliferate and produce data, companies across all industries will be able to glean vital information, whether that’s insight into their own operations or for driving automated decisions into adjacent business systems. At that point, much of the hype will begin to become a reality.
What would you say is a realistic view of the value and potential impact of the IoT?
Ashwin Kotian: The IoT is as much about incremental savings as it is about revenue, and the value will vary depending on the business’ own objectives. Some of our customers have used thousands of sensors to deliver millions of dollars in energy savings. Others focus on minor alterations using the instrumentation of critical assets, such as a one-degree Fahrenheit increase here or a couple of high-value assets tracked there, that, when multiplied across a global IT estate, can equate to significant savings.
Some of the world’s largest IT vendors, like Cisco, IBM and Dell, are investing millions in IoT innovations, which says a great deal about the value and potential impact of the IoT.
Do the IoT’s benefits reside more in innovation, new product offerings, and business models, or efficiencies and cost savings related to existing models? Or do the benefits encompass each of these areas?
Ashwin Kotian: The benefits of the IoT encompass not just these, but many other areas too. Businesses learn more every day with every connected sensor and device. Data centers can assess their power efficiencies in real time and adjust them by the slightest margin to realize massive cost savings. IT organizations can identify potential risks to critical business operations by having a real-time pulse on connected physical assets that power their business. Entire cities are deploying thousands of sensors to monitor and reduce air pollution levels to improve the lives of their citizens. The quality of insight rendered by IoT generated data helps connect businesses with their customers more intimately to drive better engagement and retention.
How can organizations considering IoT strategies and investments distinguish hype from the actual potential of the technology and make wise choices versus getting caught up in the excitement?
Ashwin Kotian: Good question. The market can be complex because some providers rely on unfounded promises, so it is very important to look for credible insight from companies with a proven track record.
It’s also vital not to get caught up in different understandings of the IoT. In the consumer market, it’s about home automation, wearable technology, and smart devices. But for corporate users, it is focused on efficiency and operations management.
I’m stating the obvious here, but you should start with a core set of problems that you are looking to address and see if the IoT would be a good fit to help address and solve the issues. An organization needs to be absolutely clear about their objectives with the IoT and look for a platform or a set of solutions that have already delivered tangible results for other organizations.
Getting beyond the IoT’s potential, what are some industries in which the IoT is already having an impact? Which industries stand to see the greatest benefit from the IoT? Why?
Ashwin Kotian: For some time now, the IoT has been having a significant impact on data centers with demonstrable improvements in operational efficiency and reductions in the total cost of ownership. The IoT in the data center has forced IT to be more accountable, gaining financial and operational control in the process. It has helped IT and data centers to be better equipped for managing operational risk and compliance.
In general, the IoT resonates really well in process-driven industries with high-value business assets operating at some level of scale or complexity, such as manufacturing, healthcare, supply chain, oil and gas, etc., where visibility into and availability of critical business systems are of paramount importance. For example, a hospital needs to know in real time which crash carts are available and their precise location; industrial firms use the IoT to track containers in real time from the manufacturer to distribution centers to retail outlets, providing them visibility and predictability into their operations.
Can you describe some real-world examples of organizations that are already benefiting from the IoT?
Ashwin Kotian: John Deere, the farming equipment supplier, introduced a semi-IoT, GPS-based automated guidance system in 2001 and it is now utilized in over 200,000 vehicles. The key benefit to using IoT-enabled technologies is precision. If a vehicle is being used to sow seed, the GPS device provides the guidance needed to deliver precise, side-by-side seeding with no overlap. Research suggests a 10 percent saving on costs can be achieved.
Rolls Royce is another company tapping into the IoT, to track thousands of engines using on-board sensors and live satellite feeds. The solution, Engine Health Management (EHM), uses predictive analytics to predict and detect potential issues to treat threats before they develop.
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