One day soon, we will wake up and wonder how we ever survived in a world of disconnected things. Our homes, our offices, factories and vehicles will be full of connected devices.
The World Economic Forum estimates that the number of connected devices will grow from 22.9bn in 2016 to a headline-grabbing 50.1bn by 2020 - equivalent to almost five connected devices for every person on the planet.
But that will be just the beginning. Welcome to the Internet of Things (IoT).
Connected devices range from Wi-Fi connected consumer products like Google’s Nest thermostat and Amazon’s voice-enabled Echo device, to connected cars, jet aircraft engines and shipping containers that use cellular or other wide-area connections, to networked connected cities where traffic, utilities and even street lighting are now part of the IoT story.
Underpinning the growth of IoT are tumbling prices for the sensors that turn things into smart devices and capture data from the environment around them, and the vast data-centric and mostly wireless networks that connect these devices to each other and to the broader internet.
As the sensors grow ever cheaper, and the network grows ever larger, the more data we can collect and analyse.
Just like other commoditising electronic components, fierce competition and Moores’ Law has driven down prices, especially for accelerometers and gyroscope sensors typically used in smartphones and other mobile devices.
As a result manufacturers can add sensor and communications modules to almost any product for a few dollars bringing the day when everything valued at $10 or more is IoT-ready a big step closer. “Our perspective is that cost of both the sensors and devices is approaching free and the size is approaching invisible.” says James Bailey, managing director of the mobility practice at Accenture last year. “Our perspective is literally everything will have IoT technology at some point,” he said.
At the same time, the cost of embedded processors, networking and cloud-based computing – other key components in the IoT world - have all fallen.
IoT – particularly the Internet of Industrial Things (IoIT) - is about hyperconnectivity and sensor-generated data - huge wads of it. But the real value lies in what you can do with that data – in the outcomes it enables, rather than the collection, transmission or storage of that data.
“We need more data-driven decision making,” said Tanja Rückert, executive vice president of digital assets & IoT at SAP during SAP’s Executive Summit Internet of Things. Her views were echoed by Nils Herzberg, SVP of global co-lead IoT Go to Market who stressed that “data is the fuel of the 21st century.”
Nevertheless, a recent study found that while 81% of business executives believe that successful adoption of industrial IoT is critical to their company’s future success, only 25% have a clear industrial IoT strategy.
This stark reality is both a challenge and a huge opportunity for those enterprise software and services companies that have the technology and tools available to help people and businesses make sense of, analyze and harness the Tsunami of data that we are about to be engulfed by.
The real business potential and opportunity to add value through IoT lies in the transformation that IoT will enable in almost every industry as companies transform into digial businesses powered by real time data.
As Herzberg says, the beauty of sensors that they bring real-time data to applications. “Customers run applications for business critical processes, which could run better with real-time awareness.” Once you have been able to collect the data from a sensors, and combine it with other internal or third party data sources, you can begin to build increasingly complex sets of predictions. You can start modelling and create a more complex system and modelling dependencies between things.
Big data analytics and machine learning will deliver personal and business insights and will enable us to make immediate decisions based on that data – rather than relying as we have in the past, on guesswork or out-of-date forecasts. “When sensors provide real-time information, customers can make better decisions, rather than using guess work,” says Herzberg.
IoT–based business models will exploit the information generated by connected devices in many ways for example, to understand customer behaviour, to deliver services, to improve products, and to identify and make key business decisions at critical moments.
IoT data is already helping companies track goods on their through the supply chain and immediately alert managers in case of theft or damage, reducing waiting times in busy ports, playing a key roll in jet engine and tractor predictive maintenance, helping farmers optimise crop yields and improving safety across a number of public and private enterprises.
So how big is the market opportunity? Cisco, the networking equipment group, predicts the global IoT market will be $14.4tn by 2022, with the majority invested in improving customer experiences.
Cisco suggested that additional areas of investment would include reducing the time-to-market ($3tn), improving supply chain and logistics ($2.7tn), cost reduction strategies ($2.5tn) and increasing employee productivity ($2.5tn).
But the implications of IoT and the big data analytics that it feeds will go far beyond traditional business models and have a profound impact on both enterprises and individuals. When combined with machine learning and cognitive computing, the insights derived from IoT data will enable us as individuals and businesses users, to deploy intelligent agents empowered to make autonomous decisions and negotiate with other agents on our behalf.
This is not about machines replacing humans. Rather intelligent apps augment humans’ ability to run the business. predicted businesses will deploy intelligent agents across multiple areas to help all employees, from sales to suppliers to shop floor.
Underpinning SAP’s IoT strategy is the conviction that ultimately machines will help people understand connections between information by monitoring, analyzing, and correlating data that people wouldn’t see ordinarily. This helps people improve outcomes. For example, in healthcare it can mean improving patients recovery times.
Enterprise IoT may be big data’s killer app, but ultimately its still about people.
Paul Taylor, SAP
This advertisement feature is paid for by SAP, which supports the Guardian Media & Tech Network’s Digital business hub.
