Throughout history, data has been a critical resource, providing the insights to drive transformative and beneficial innovation. Over time, methods for collection have improved, allowing more complex and higher quality data to be captured in larger quantities. The internet of things represents another evolution in data collection and presents exciting opportunities for transformative business growth.
Currently, IT-focused projects, including data center management, surveillance and security monitoring, continue to be the main drivers for IoT spending. However, as companies become more familiar with the technology, 451 Research projects that IoT applications will spread further into the enterprise.
This proliferation can be attributed to recent advancements in key technologies that have enhanced IoT’s capacities and utility within enterprises and supported growth through digital transformation.
If you understand the ecosystem of forces driving IoT, unprecedented opportunities exist for business growth.
Growth beyond IT applications
The 451 Research survey report on IoT found that over 65% of IT and IoT decision-makers plan to increase their IoT spending in the next 12 months, with an average spending increase totaling nearly 18%.
While the majority of current use cases are focused on IT applications, future projects are predicted to focus on industrial applications. Some of the biggest industrial enterprises, including GE, Siemens and Schneider, are investing billions in their IoT platforms.
Tech products and services in particular are vulnerable to the “digital vortex” of rapid marketplace change. The ability to scale and quickly adopt and adapt new technologies will determine longevity.
A report by PricewaterhouseCoopers named multiple factors that are enhancing the utility of IoT and ultimately driving its growth:
- AI: Data has become an organization’s most valuable asset, but it is only useful if it is actionable. Artificial intelligence helps make data actionable, supporting enhanced IoT applications that enable predictive, prescriptive and adaptive analytics. Artificial intelligence will continue to heighten productivity and expand business opportunities beyond anything previously possible.
- Proliferation of connected devices: IDC projects that the number of internet-connected devices will grow to 80 billion by 2025. These devices will generate 180 zettabytes of data per year, in contrast to 4.4 zettabytes in 2013 and 44 zettabytes in 2020.
- Cloud/fog computing: Cloud computing paved the way for IoT, and now fog and edge computing is furthering its growth, extending cloud capabilities closer to connected devices and facilitating the operation of compute, storage and network services between end devices and cloud computing data centers.
- IT/OT convergence: As information and operational technology have begun to interconnect, mountains of previously unavailable data are being generated and captured. The coming together of these historically siloed departments means more informed decisions, reduced operational costs and improved production processes for the manufacturing industry.
Driving digital transformation
The ecosystem of IoT and its supporting technologies are driving digital transformation, enabling growth through the strengthening of current business models and the creation of new offerings, services and products.
IoT will be used within enterprises in areas supporting digital transformation, including:
- Discovery of new business opportunities — The gathering and analysis of massive data sets generated by IoT devices can help companies gain a more accurate and comprehensive understanding of their customers’ use cases and preferences. Previously unseen insights into their offerings can turn into new products, services and ways to create value for their customers. These insights will also be used to proactively augment current products and services based on access to real time data.
- Improved customer experiences — Customers today expect simplicity and 24/7 accessibility. IoT-enabled big data analysis can help businesses build a better platform, tool or strategy that will improve consumer experiences through multiple touch points. With a comprehensive understanding of customers, businesses will be able to personalize their marketing efforts, positioning relevant products and services to each customer. On the service side, access to complex, real-time data will enable businesses to streamline workflows and better react to urgent issues. These advancements will free up personnel resources to interact with customers and better anticipate their needs, enhancing satisfaction and engagement.
- Boosting efficiency and reducing costs — One of IoT’s greatest utilities lies in its ability to reduce costs and increase productivity through the automation and integration of processes. The combination of data-driven insights and sensor-integrated systems presents the opportunity for businesses to improve operations in multiple areas, including inventory and human resource management, security, energy and safety compliance.
- Increased agility — As organizations break free from slow legacy IT systems, they can become more nimble and responsive to current market trends and demands with greater speed. This frees technology and personnel resources to focus on strategy and innovation.
Harnessing the power of IoT
It’s clear that digital transformation is highly beneficial — and unavoidable if businesses want to remain competitive. This transformation requires a solid understanding of the forces driving it. IoT is a major force, with the ability to create unprecedented value as companies shift how they do business. They stand to gain greater operational efficiencies, significant cost savings, greater customer engagement, competitive advantage and more as they integrate IoT into their business models.
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.