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IoT myths busted for your business

From smart toothbrushes and pet beds to connected cars and cities, this year’s Consumer Electronics Show (CES) had an IoT thing for just about everyone — a testament to how ubiquitous internet-enabled technologies have become in both the enterprise and consumer realms. Given all the exciting tech at CES, it is easy to see how businesses can get wrapped up in the IoT hype.

The problem, however, is that all this hype often leads companies to focus on IoT’s short-term impact. Sure, starting the IoT journey with improving and automating existing processes to yield immediate efficiency gains is a great first step. But to reap the full benefits of IoT’s transformational potential, we must chart IoT roadmaps that lead to new value propositions, new business models and new markets.

The hype around IoT is compounded by several common misconceptions about how it should be used and how it should be implemented. Interestingly, I have seen the same IoT misconceptions arise repeatedly, preventing organizations from starting on their IoT journeys or derailing their initial IoT efforts. So, if you are looking to start (or restart) an IoT project, you’ll need a clear and fact-based understanding of IoT.

With that in mind, here are the top five IoT myths busted for your business.

Myth #1: IoT is all about consumer devices and the connected home

Reality: To date, most IoT value and opportunity are in the business and industrial sectors, which are actually ahead of the consumer realm in IoT impact.

Connected refrigerators, toasters and other household appliances can make our lives easier, yet are some of the most overhyped aspects of IoT. For the most part, the real impact of IoT has been found in the business world. In fact, analysts predict that B2B IoT segments will generate more than $300 billion annually by 2020, while consumer applications will generate $150 billion in that same time frame. With consumer IoT still developing, $150 billion is no small number, but business IoT clearly presents the biggest opportunity to bring about transformative change.

Consider Japanese industrial equipment manufacturer, FANUC. By gathering data from IoT devices installed at customer sites, FANUC offers remote monitoring, analytics and predictive maintenance services to clients. As a result, GM, a FANUC customer, has avoided 100 potential failures of vehicle-assembling robots, while preventing assembly line interruptions that can take up to eight hours to resolve.

In the long run, I do believe that the most disruptive IoT innovations will actually happen in the consumer IoT space. However, in the meantime, the business model of interconnecting devices in the home will continue to focus on monetizing user data.

Myth #2: IoT is a single market where one size fits all

Reality: IoT comprises many markets, each with unique environments, legacy technologies, requirements and ecosystems. Thus, the integration of horizontal, vertical and regional capabilities into a solution is key.

In what I like to think of as the “first wave” of the internet, tech companies focused on developing horizontal capabilities for IT, service providers and consumers. But this strategy alone would not work for IoT, which is a collection of markets, sub-markets and ecosystems where lines of business — the major IoT buying centers — want business systems, not individual technologies.

To succeed in IoT, technology providers must either develop highly targeted horizontal capabilities and integrate these tightly with vertical and regional ecosystems, or they can focus on one or two use cases in a specific market. Both strategies allow them to target large total addressable markets. A great example of the former approach comes from FogHorn Systems, which develops edge intelligence software for industrial IoT applications. With a demand for its software across sectors, FogHorn recently built an end-to-end partner ecosystem to ensure the delivery of hyper-local technologies. The ecosystem features industrial IoT consultants and systems integrators who provide domain-specific data analytics, application software development and on-site implementation services.

Myth #3: IoT is all about connecting billions of devices — the more connections, the better

Reality: IoT is about generating actionable data that can be analyzed to drive better business decisions.

As we’ve seen from some high-profile flops like IoT-connected juicers, simply trying to connect as many “things” as possible is a recipe for IoT disaster. Yes, those connections are the basis for IoT, but the true value stems from the real-time or near-real-time data streams such connected devices generate that can be analyzed and turned into actionable business insights. For example, using IoT sensors to monitor the condition of its vehicles, mining company Rio Tinto enables predictive maintenance to address issues before they become major problems. The company now saves up to $2 million per day every time it avoids a breakdown.

Myth #4: IoT by itself is transformational

Reality: IoT must be combined with other exponential technologies such as artificial intelligence and machine learning, blockchain and fog computing to deliver a comprehensive and long-lasting impact.

To unlock the transformational power of IoT, enterprises must integrate it with other groundbreaking technologies. In particular, the convergence of IoT with AI and machine learning, blockchain and fog computing will also help overcome key IoT barriers to adoption, such as security, cost, complexity, and speed. For instance, AI and machine learning provide a deeper analysis of real-time IoT data streams to drive more robust decision-making, while fog computing makes IoT data available on the edge of the network to solve latency, bandwidth and reliability challenges. Additionally, blockchain enables secure, audit-level transactions, without the need for a centralized intermediary between communicating devices.

Together, these technologies create some very formidable combinations. Think of drones: When powered by IoT and AI, autonomous drones can operate more efficiently than their piloted counterparts, safely avoiding bad weather, trees and other obstacles. As a result, field service organizations can use these devices to inspect oil rigs, or surveyors can easily document remote and rugged terrain.

Myth #5: IoT will never be secure

Reality: IoT can be secure and safe.

With cybersecurity incidents in the news daily — from the KRACK attack on Wi-Fi systems to the infamous WannaCry ransomware — businesses and consumers alike have many justified fears about the security, safety and privacy of millions of IoT devices. Undoubtedly, the pace of technology driven by IoT requires new approaches to security. The good news is that security vendors, enterprises, startups and even device makers are all finally making IoT security their top priority. Enterprises, in particular, increasingly understand the risk-and-reward, tolerance levels of their security investments, with many now focusing on stronger security measures as a growth advantage.

We now see more organizations moving from the traditional “security by obscurity” method to an end-to-end, comprehensive, policy-based architectural approach to IoT security. At the same time, horizontal and vertical standards bodies are actively developing IoT security frameworks, standards and methodologies to ensure the safety of connected devices and IoT systems. We even see governments playing a role in overcoming IoT security, such as the Federal Trade Commission’s guidelines on how manufacturers must inform customers about device security. In the end it comes down to this: IoT security is everyone’s responsibility. Everyone from startups and service providers to corporate end users, industry and government organizations must increasingly follow and share best practices to make IoT safer and more secure for all.

As with other over-hyped technologies, it is challenging to decipher which aspects of IoT are real and relevant, and which are myths and misconceptions. Because IoT has the potential to be so transformative to every business, it is imperative to separate fact from fiction as you get started on your IoT journey. So, before diving into an implementation, take a step back and truly understand IoT, its role in the enterprise and the value it can deliver when properly and securely deployed. I hope that by dispelling the most common myths about IoT, your company will readily make your next IoT initiative a successful reality.

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.

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