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The future of the Internet of Things still murky

Customers increasingly expect Internet-of-Things-connected devices to undergird how companies do business. But challenges are holding it back.

To make business operations more efficient, Atek Access Technologies turned to the Internet of Things.

St. Paul, Minn.-based Atek manufactures various products for the oil industry, whose customers haven't always been the most forward-looking. But earlier this year, the Internet of Things (IoT) enabled Atek's customers to reduce costs and become more efficient in their oil deliveries. Instead of sending out trucks once a week -- whether tanks needed oil or not -- the company put a new IoT-connected device in its tanks to indicate whether a delivery is necessary.

"The way the [oil] industry worked forever was you basically make milk runs," said Sherri McDaniel, president of Atek, at the mid-October Dreamforce 2014 conference in a session on IoT. "Ed's shop gets a pickup or delivery every Tuesday -- regardless of whether that oil tank is full or empty. That's a pretty inefficient system," she said. But Atek's TankScan device, a wireless monitoring tool, can indicate when companies need fuel automatically. Product data is also automatically fed into Atek's Salesforce CRM platform, which houses its customer account information.

One pixel IoT technology starting to impact product
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Atek customers have been able to reduce unnecessary truck runs and improve business process management. IoT devices also help with inventory management by giving customers a better sense of how much fuel is in those tanks and advance notice about service needs -- before parts break.

IoT-connected devices have enabled more precise, automated customer service; devices connected to the Web can send data back to a company without manual human effort. By receiving this information in real time -- or ahead of time -- companies can use IoT to improve customer service and boost sales. But challenges like data security and a lack of standards are holding IoT back, relegating it to the realm of the experimental rather than the mainstream.

[There's] a pickup or delivery every Tuesday -- regardless of whether that oil tank is full or empty. That's a pretty inefficient system.
Sherri McDanielpresident, Atek Access Technologies

Other companies are making similar use of IoT-connected devices not only to make business operations more efficient but also to stay compliant with government regulations.

Ergon Inc., which is based in Jackson, Miss., has various business units that gather, process and sell crude oil, and it also makes various products from oil. The company uses IoT not only to make business operations more efficient but also to ensure safety in its "highly regulated industry," said CIO Greg Ostendorf.

The company uses IoT sensors in its 175 trucks on the road to deliver information back to Ergon on such metrics as truck routes, driver break time and truck maintenance.

"We know if a trucker got in an accident, how hard did they brake -- all that information -- it's all real-time," Ostendorf said. These sensors can also deliver data about whether truckers are abiding by regulations. "Did they take a long enough break or are they over the number of allowable hours? We know if they're idling when they're on break and did they move more than X number of feet." With this information in hand, Ergon can ensure that truckers are in compliance with regulations.

What's holding IoT back?

According to recent data, IoT is poised to explode. Research firm Gartner estimates the number of things that will be connected to the Internet by 2020 will increase to 50 billion. And IDC predicts that the worldwide market for IoT will grow $1.9 billion to $7.1 trillion in 2020.

But prognostications about IoT's coming explosion have to be tempered by the true state of IoT today. According to the July survey "Sizing Up the Internet of Things," by CompTIA, the IT trade association, for example, 51% of nearly 300 respondents think that IoT is appropriately hyped these days; 48% think it's overhyped. That gap between promise and acceptance has to be closed.

Part of this hesitation involves data security. The Internet of Things opens the door to data security breaches, where hackers can commandeer the data generated by connected "things": Homes could be robbed and oil tanks and other important resources could be hijacked.

Challenges like data security are holding IoT back, relegating it to the realm of the experimental.

At the 2014 MIT Sloan Symposium, MIT professor of engineering Sanjay Sarma said that IoT was hampered by a lack of security. "Don't kid yourself," Sarma noted. "We can hack your car today. You're already on the Internet of Things; it's not the future."

As Sarma and others at the symposium noted, better security requires that the industry and the market coalesce around common standards. "There are several organizations that are vying to define those standards and the market will shake out," said CompTIA's Seth Robinson, VP, technology analysis. "It will be fairly complicated in the short term until we're able to turn the corner and get to some agreement on what we should be using."

Yet a third issue that seems to be holding IoT-connected devices back from mainstream takeoff is the data overload this steady stream of information is predicted to bring. "People will have to make decisions about what is critical and what isn't," said Paul Noel, senior vice president of procurement solutions at Ivalua Inc., which provides spending management software to help companies negotiate optimal pricing with suppliers. "There will be opportunities but also pain in knowing what to pay attention to."

Still, the consumerization of IT may hurry IoT along. As is the case with mobility and cloud-based applications, consumers are ahead of the curve with IoT. For example, Fitbit Inc.'s wearable activity trackers have become standard fare.

Consumer expectations may also force the Internet of Things -- much like cloud-based apps and mobile devices -- to lurch forward in the enterprise.

"There's a change in expectation from customers, and you're going to start to feel it," said Mike Dannenfeldt, senior vice president at Etherios Solutions, an IoT provider in Chicago. "Customers won't want to buy your product unless it's delivering great customer experience."

Next Steps

The future role of the Internet of Things in enterprises

Seven enterprise risks of the Internet of Things

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