Arguing the business case for IoT adoption

With every new technology, there are early adopters and late ones—those eager to jump on the freshest innovation and those who wait to see how others fare. For businesses, there are two main reasons to adopt IoT. First, there is the chance to solve an existing problem or challenge. Second, there is the potential to capture opportunities. Where do big businesses fall in terms of their reasons for getting on board with the Internet of Things?

Problem solving may take priority, but innovation matters

According to Kevin Saye, Technical IoT Specialist at Microsoft, enterprises skew heavily in favor of solving existing challenges over doing something novel. “I see a ratio of about three to one in favor of solving a problem. But there are about 25% looking to do something that has never been done before.” For example, one client in the health and fitness industry aimed to take data off wearables in the gym for tracking, prediction, and competition purposes. The solution would collect data from all wearable devices in use by gym goers and visualize it. The follow on aspects of this data aggregation and analysis could lead to social and gamification aspects that go well beyond traditional IoT, driving more engagement from the fitness industry’s user base as a result.

Sometimes, what begins as a way to solve an existing problem turns into an opportunity to create broader ripples of change. Azure Data Solution Architect Ranga Vadlamudi spoke about one company that created an IoT solution for their own use, converted it into a service, and then started selling it to other users to generation revenue. “They implemented it internally, and have now turned it into an ‘as a service’ offering.”

What sectors are poised for IoT growth?

Steve Ball, Senior Director of Product Management at Senet, has found that IoT adoption is being applied in every possible vertical. But his company is focusing on a few key areas that may prove to be big movers over the next five to ten years. Agriculture is one example with its emphasis on water management. “Water actually crosses a number of verticals. There is metering for municipalities, there are business customers, infrastructure, distribution, wastewater, and a crossover into agriculture.” California is one prime target region, since this major food producing state is constantly battling drought conditions. “They can benefit from instrumentation that monitors the flow through irrigation points, measuring water diverted from ponds and streams in real time.”

Ball also pointed out opportunities in areas such as asset tracking for everything from humans to livestock, pets, bike shares, and the food chain. Oil & gas companies such as propane providers are also using IoT to optimize inventory and delivery routes. “Large companies already have solutions and are trying to expand and capture new opportunities with IoT. They are looking for a new business idea, cost saving, or a branding twist to gain revenue.”

Who wants IoT within the organization?

According to Kevin, the push for IoT does not usually come from internal IT. “The business side has ideas, they are dreaming and thinking big.” In contrast, the IT side is wary of the unknown, trying to manage what’s already in place, reduce risk, and not let things get out of control. Doing IoT means using the cloud, and that’s one stumbling block. “They are uncomfortable with delivery in the cloud, moving from CapEx to OpEx.” With a consumption based model, cost overruns are a concern. Empowering IT to manage risks while delivering value for business stakeholders is a key mission for Microsoft’s Azure team.

Of course wanting to implement an IoT solution isn’t enough. Ranga mentioned the most vital questions that businesses must ask. “First of all, what is the value proposition in deploying the solution? What is the gain? ROI is not just in dollars but in improving operations and service.” In the manufacturing sector, IoT is often deployed to head off production losses. “With sensors communicating data, you can identify a machine that is on the verge of failing. You don’t just find out about the problem after the failure, when you begin losing productivity.” Instead, the business can predict a failure before it happens and perform scheduled, controlled maintenance, avoiding downtime and the potential domino effect of machine failure causing more problems in equipment farther along the production line. That’s a business case where IoT delivers measurable value.

Big business is next in line to get hyped on IoT

Tahir Hussain, an angel investor and CEO of Collide Village, spoke about the way enterprises are poised to make a significant push into connected, intelligent technology. “In the consumer space, IoT is at the top of the hype cycle. But industrial and enterprise IoT are the next big thing.” Tahir also spoke about particular interest in smart building, city, transportation, blockchain and industrial/manufacturing sectors. His organization’s recent IoT hackathon focused on these categories of innovation with a view toward identifying one or more startups that can serve the business and government sectors.

Some high end manufacturers are already taking the initiative to make their products more connected and doing more with the data they are gathering. Rolls Royce is one example of a big business that has taken IoT and made it a core feature of its intelligent engines for the aerospace sector. These engines will leverage IoT technology, the Cortana Intelligence Suite, and Azure Cloud to improve operations, fuel usage, and maintenance planning. The goal is to retain asset value throughout an engine’s lifecycle and reduce disruption to flight schedules.

For middle-of-the-road businesses that are not used to being at the forefront of innovation, adoption will be somewhat slower. However, as more and more use cases come into play, it will be easier for even the most reluctant enterprises to start grasping the value of IoT. Smart technology will end up making companies smarter in the ways they find to drive up revenue, drive down costs, and create better business models.

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