Every time you turn around there is some sort of bullish forecast on the number of connected devices enabled by the internet of things. One example is this forecast predicting over 24 billion IoT devices by 2020 (and 34 billion total connected devices). Yet with all of this hype, some will tell you that we are still not articulating the real value of IoT and its impact on the business ecosystem. Tim O’Reilly said in an interview last year that Silicon Valley is “massively” underestimating the impact of IoT: “But I think they are missing the point. They are creating some gadgets, but they aren’t thinking about systems.”
After looking at the enterprise IoT space for the last couple of years, I also believe that the impact of IoT on the enterprise will be massive, disruptive and, in many ways, underestimated. Why underestimated? Much of the hype around IoT today is based on consumer context: I have a smart thing that I monitor and control with a smart device that uploads smart data to the cloud so I can have smart analytics about my smart thing. This conversation can apply to all kinds of consumer scenarios, and often drives people to think of IoT in the context of smart things/smart devices.
IoT challenges in the enterprise
The reality is, in an enterprise environment, IoT will be much more complex than the individual smart device/smart thing relationship. It gets back to Tim O’Reilly’s point about systems. When we started talking IoT initiatives nearly two years ago, we found most people were not excited to talk about IoT as it related to a new sensor, device or gadget. Instead, they were intrigued when you talked about the potential for IoT to help solve complex business problems. As organizations become increasingly digital in all aspects of their business, new challenges in managing the connections, devices and applications that make up their digital business arise. This is especially relevant as enterprise applications evolve to be a collection of services and interactions spread across the cloud, on-premises systems and devices/sensors/things.
The value in this enterprise context is the potential for IoT to manage the interactions within this complex fabric of new sensors, gadgets, mobile devices, apps and old legacy applications and physical infrastructure. But, how exactly does IoT help manage this complexity? This is where you move the IoT conversation beyond things — where a “thing” is defined as some sort of sensor or device — and more toward how you can solve complexity by integrating things together and automating processes within the digital business. Essentially, IoT can help the enterprise deliver integrated experiences across applications, devices and cloud services in an increasingly digital world. This is where the evolving IoT platform comes in to play.
The evolving IoT platform
That in itself sounds challenging, but haven’t we been talking about integration challenges in the enterprise now for decades? According to IDC, “The IoT platform, at its most basic level, is the middleware that connects endpoints to applications, enterprise backend systems and analytics tools.” The IoT platform has the potential to be the orchestrator for the digital business; connecting the new and the old, managing workflows and leveraging these workflows to better understand the best way to operate the business. The challenge with IoT platforms is immaturity. There are all kinds of choices out there, with new platforms announced by the day, and probably no one platform that meets all of the needs for the enterprise. And, many of the IoT platforms have the look and feel of a developer tool set, requiring the enterprise to invest in building their own IoT solutions.
Much of this is expected, as it is still early in the evolution of the IoT platform. But, this can also slow adoption until IoT systems mature. Last year, Gartner stated that 42% of organizations are using or planning to use IoT solutions within the next 12 months. This also demonstrates that nearly 60% of organizations are not planning to use or deploy IoT solutions in the next 12 months. It would also not be surprising if many in that 42% are in the early pilot stage or testing stage. In conversations with customers, it is clear that in some markets, there are mature plans for enterprise IoT deployments (like manufacturing, smart cities), but we are just at the beginning of enterprise IoT adoption for many other industries like healthcare and education.
While IoT in the smart thing/smart device context is seeing successful traction, the current challenges with IoT platforms may make it difficult to determine when is the best time to launch an enterprise IoT project. To determine whether IoT is a fit, take a close look at your business needs and business processes, and ask the question, “Are there current business challenges and inefficiencies that could be addressed through better integration and orchestration?” As organizations continue down the path of digital transformation, as they move to connect apps, devices, services, data and people spread across the globe, IoT will increasingly be viewed as an opportunity to orchestrate away complexity for the enterprise.
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