Internet-enabled devices aren’t a passing tech fad, they’re drivers for a global technological revolution.
These internet-enabled devices that communicate with each other are referred to collectively as the internet of things. Common household examples of the internet of things include Wi-Fi-enabled sprinkler systems that allow consumers to activate watering systems from their phone using weather, sun exposure and soil type to maximize efficiencies. Another example is “smart” carbon monoxide detectors that send alerts to the user’s smartphone when anything dangerous is discovered.
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While these types of smart devices have been around for a number of years, their popularity is starting to take hold, with an estimated 25 billion internet-connected devices expected by 2020. The big potential behind IoT is expanding, too; while an app-controlled sprinkler may be considered a novelty or a luxury, these technologies are becoming increasingly widespread and are being designed for increasingly impactful applications.
The IoT “trend” hasn’t escaped the eye of big business. Aside from competing for a slice of the consumer electronics pie, corporations have taken note of some transformative applications for the technology within their operations.
Indeed, the rapid growth and incorporation of internet-enabled devices is forcing entire industries to embrace disruption (or fall victim to it) as they reinvent themselves as digital businesses, blending their offline offerings with software suites or digital support that improve upon the product.
Every industry — from manufacturing to healthcare to retail — has waded into the IoT waters, identifying and developing applications that improve operational efficiency and accommodate for consumer demand.
Why are businesses tapping into IoT?
Business models that rely on IoT are often considered to be in an “immature” stage, but are at the same time expected to develop into core components of any mature corporate structure.
For many businesses, there’s no better time than now to start incorporating IoT technologies into their operations. Here are a few reasons why:
- The cost of IoT technologies is dropping. Machine-to-machine communication has been in play for quite some time. However, now that IoT technologies are more commonplace and pervasive, the cost to implement and use those capabilities has dropped exponentially. This drop has made it easier for latecomers to unlock the hidden potential in existing assets, improve upon their current structures, etc.
- Businesses are finding new ways to leverage IoT products. Not everything in IoT portends a groundbreaking new business model. In some proven success stories, IoT technologies are leveraged to improve current operations. The applications vary widely; novel uses by retailers include enhanced anti-theft systems that wirelessly interface with RFID chips, while mining companies utilize IoT technologies to improve autonomous haul trucks.
- The return on investment speaks for itself. Thanks to the insight IoT technologies provide, operations and facility managers can address problems directly in real time before capital degradation kicks in, extending uptime while limiting repair costs and headaches.
While the time may be ripe to adopt IoT technologies across the board, one market in particular is feeling the pressure to modernize and utilize these technologies: the energy and asset management sector.
Energy and asset management: Rife for IoT disruption
Energy and asset management solutions have in many ways been hit by the “perfect storm” for IoT-driven acceleration and evolution.
Demand for energy is ever-growing, with consumption expected to increase 56% by 2040. This increase, coupled with an aging energy grid not capable of handling the modern demand and the perpetual push for operational excellence, has given birth to a submarket of solutions and specialized processes designed to squeeze more production out of the same resources. Enter energy and asset management — typically the most direct path for businesses to build out their IoT programs.
For their part, some energy providers have taken note of the demand that bore this market and have expanded their own offerings to include a smart grid services — normally in the form of demand-response and open energy buy-back programs. Access to these programs and the capabilities born of them has created a virtuous circle in further shaping demand for comprehensive, intelligent and responsive energy and asset management technology.
As smart grid investment grows, the impact on the demand side will grow exponentially as asset and energy management solutions help unleash more value from critical systems.
This is where the internet of things comes into play. By making more devices connected and self-reporting, it affords facilities managers previously unimaginable insights into the operational health of those devices and their composite systems. Owing to the complex dependencies and common asynchronicities involved, this effect is especially pronounced when it comes to electrical assets.
This creates a new paradigm for energy management solution providers — at least it should for those energy management companies wise enough to take note and adapt. Monitored devices need to communicate with one another and with other systems — it’s no longer enough to separately look at the energy data of each individual asset, nor is it sufficient to look at amalgamate building-wide or zone-wide datasets.
The forward-thinking modern facilities manager needs to see each part as it plugs into the whole and the whole as it’s made up of each part. This need for a synthesis of macro- and micro-operational examinations parallels the way in which modern medical science approaches human health. A physician examines the body as a whole while a lab technician examines samples at the cellular level.
As a result of this type of comprehensive monitoring, the adoption of advanced IoT-enabled visualization, diagnosis and optimization processes are creating higher value-add potential for energy and asset management solutions.
Because these solutions rely so heavily on the internet of things, (in fact, it would not be an exaggeration to say that they are part and parcel of the internet of things) it’s imperative that they be designed integration-compatible, with the ability to draw data from multiple different systems and capable of interfacing with different cloud applications. This open-integration structure is key to ensuring scalability, action-ability and constant upgradeability.
In every industry, managers are demanding ever-more sophisticated energy and asset management solutions so they can optimize performance while minimizing downtime, repair costs and resource waste. As a result, the best solutions all have one thing in common — they leverage the internet of things to generate big data and process it into actionable data. In this way, such solutions put control back into the hands of managers.
The internet of things has a way of stoking the imagination and inspiring people to ask “why not?” For energy and asset management firms, this has meant an avalanche of demand for new functionalities, greater system integrations and improved operational intelligence.
Making for an increasingly demanding and unforgiving competitive landscape, some companies have failed to keep up with shifting expectations. For those solutions providers that have managed to successfully adapt and evolve their products and services in line with the ascent of IoT, however, they’re all the better for the pressure. These companies are poised for many successful years ahead as they stake out a place for themselves in the internet of things.
So prominent are energy and asset management within the broader IoT landscape, in fact, that many are now heralding the arrival of an “internet of energy.” As the saying goes, “every company is now a software company.” Acknowledging energy and asset management as a ubiquitous, accessible and proven path to IoT invites a slight revision to the adage: “every company is now an energy management company.”
All IoT Agenda network contributors are responsible for the content and accuracy of their posts. Opinions are of the writers and do not necessarily convey the thoughts of IoT Agenda.