When IT meets the IoT

The Internet of Things goes by many names. But whatever you call it, the embedding of rudimentary intelligence and communications capabilities into an expanding array of physical and organic “things” is well under way. And it will materially impact modern existence. The question facing executives in general and IT professionals in particular is not so much “What can smart things do?” as “What can we do with smart things?” Specifically and more strategically, what do all these smart things do for us, and what do we need to do to make money with smart things?


There are now thought to be roughly 5 billion connected things. By 2020, there will be over 200 billion smart devices. That’s 26 smart objects for every man, woman and child on the planet. We will be living in a “sensor jungle” alive with microdevices tweeting and chirping their status constantly.

In the “connected transportation” space alone, there are 369 companies in 11 categories that have collectively raised $3.15 billion. Venture capital firm KPCB estimates that “the Industrial Awakening will generate $14.2 trillion of global output by 2030.” A 2014 report by international research company Markets and Markets estimated that the IoT will grow to $290 billion globally by 2017 and then continue to grow by 30% each year. There is definitely something going on here.

Technology adoption patterns indicate we are about five years away from a time when mainstream consumers will expect products to be situation-aware and require services to address their specific needs at any specific moment.

No one expects these devices to all be talking the same language. Zigbee, 6LoWPAN, Bluetooth Low Energy/Bluetooth Smart, Wi-Fi, NFC and cellular networks are just some of the languages machines will be using to talk to one another and to us. In the future, enterprise IT may play a major role as device diplomat and translator.

How value happens

Creating value in the IoT space requires much more than simply deploying sensors. The data has to be collected, analyzed and acted upon. The killer IoT use cases in most vertical markets have yet to emerge.

Will customers stop going to their favorite places or shift allegiance to another brand because some things are not conected? Organizations are pretty much in the dark about consumer sentiment regarding IoT. We don’t know what is signal and what is noise. In the jungle, it was an existential exercise for our ancestors to quickly and accurately determine the implications of a branch wriggling or a twig cracking (as in, “Is it lunch, or am I lunch?”). In the sensor jungle, it is similarly existential to be able to deeply understand the customer in that particular moment.

The physical environment needs to be context-aware. This has been an objective of marketers and retailers for years. Speaking at the recent DoubleClick Leadership Summit, Neal Mohan, vice president of display and video advertising at Google, talked about the challenge of in-the-moment customer service points. Marketers have to know when the just-right, rich-with-intent moment might be to deliver their advertising message. IoT systems have to know when to deliver what kind of service:

Customers no longer “go online” but instead engage in many small moments throughout the day, reflexively turning to the nearest device to solve an immediate need. In these moments, we expect the right answer and we expect it right away. In these I-want-to-know, I-want-to-go, I-want-to-do, I-want-to-buy moments, decisions are made and preferences shaped.
Laura Desmond, Global CEO at Starcom Mediavest Group, put a nice edge on it by likening the challenge of capitalizing on an info-rich future to that of electronic digital music performers, “Pick the wrong song and the audience moves on.” In the IoT world, serve up a situation-inappropriate stimuli and the customer will turn you off.

This is much bigger than just geo-locating a customer. You don’t just have to know where the customer is; you have to know where the customer has been, where the customer is going and to a certain extent where the customer’s head is. You have to understand, in the words of Doug Straton, head of the North American E-Commerce Center of Excellence at Unilever, the “customer journey.” Will this require achieving a state of perfect knowledge, where selling organizations know exactly what customers want, where they want, and when they want?

IoT systems need to be sensitive to a person’s presence and respond by suggesting and performing a specific task that enhances that person’s lifestyle.

Most organizations know that IoT is coming, but only few have a strategy to guide and sequence what to do or how to monetize/capitalize on the opportunity.

Source: Adapted from Computerworld