The Shape of Business to Come – How IoT is Driving 2018’s Business Trends

Karl McDermott
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On: 25 Jan 2018
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Internet of Things IoT

The Internet of Things has been hard to ignore for a while and developments coming to fruition in 2018 will make it hard to resist too.

It’s not just about new opportunities for businesses as they are today, it’s about the complete transformation of business models. What could it mean for yours?

Following a 30% growth in the number of connections in 2017, there are now around 8.4bn “things” connected to the internet. The prediction is over 20bn connections by 2020. Is your business one of the hundreds of thousands already taking advantage of IoT or is it more cautious and less connected? If it’s the latter, three developments on the way this year will likely convince you to embrace IoT.

Securing the Future

Many businesses hold back because of concerns that IoT offers insufficient security. When every sensor could be a potential portal for a hacker and when data is no longer stored on-site but in the intangible cloud, they wonder how security can possibly be maintained. In the coming months, these perceived risks could be reconciled by a significant development.

Whatever your view on the bitcoin virtual currency, its level of transactional security is exceptionally high thanks to its use of blockchain as the underlying technology. Blockchain’s completely decentralised nature hugely restricts the amount of access that can be achieved via a single hacked entry point.

When blockchain is integrated with IoT – as is likely in the year ahead – it could be the encouragement even the most cautious enterprises need to embrace the benefits of universal IoT connectivity.

How “Fog” Clears the Cloud

Another perceived risk of IoT is the sheer amount of data produced by the connected sensors. This data is currently transferred to the cloud for processing and analysis before it can be put to use, but such a centralised computing model will not be able to scale to match the predicted growth of IoT. Another development we are likely to see in the coming year could provide a solution.

“Fog computing” decentralises aspects of data processing, so that the only data sent to and stored in the cloud is data that needs to be there. For example, a building maintenance function monitoring lights and heating will currently send to the cloud huge amounts of data that only has a short-term value. Using fog computing, the processing necessary for controlling the building’s lighting and temperature can be carried out locally, so the data can be kept locally.

Only information with long-term value will need to be uploaded to the cloud: greatly reducing the amount that needs to be transferred and stored.

Fog computing decentralises aspects of data processing.

From Home to Factory

The third and most advanced trend affecting the development and adoption of IoT is its integration with Artificial Intelligence (AI).

Whereas many technological developments begin in industry and move into the domestic arena, AI is already well-established in homes in the guise of – for example – Amazon’s Alexa and the NEST connected home. Instructing Alexa to tell NEST to turn on the central heating when the temperature drops below a certain level is an example of simple AI/ IoT integration.

The advantage when this is applied in a more complex scenario is the ability of AI to make decisions quickly, informed by the large quantities of dynamic data provided by IoT. Absolutely no slow and fallible human intervention is required.

This fast and accurate decision-making is leading to increasing AI/ IoT integration within industry and manufacturing, where it can provide valuable analytics at the pace required in fast-moving environments.

If a production line is being monitored at every stage, alerts can be triggered the instant an asset begins to show signs of wear or failure. Suppliers can be informed before stockroom levels fall below a certain level. Contamination of a food product can be identified and production halted, well before there’s any risk of the product reaching the consumer.

Meanwhile, at the customer interface, retailers can use IoT to ensure shelves are always fully stocked and to provide timely and relevant in-store messages to consumers via their smartphones.

A New Business Model

While IoT-related trends are emerging, the most forward-looking businesses are already thinking not just about the technology, but about what it makes possible. Which is: a complete transformation of their business model.

For example, any business manufacturing a “thing” – whatever it may be – can change the way they make money, simply by incorporating an IoT-connected sensor. Take a manufacturer of passenger lifts… Instead of only manufacturing and installing the lift, the manufacturer can now use IoT to monitor it continually, which is more effective and less costly than an engineer’s monthly check-up visit. Continual monitoring means they will know exactly when the lift needs servicing, based on usage rather than the calendar. They’ll also be alerted instantly when there’s a fault, so they can respond immediately.

The customer gets a more efficient lift with fewer, shorter, out-of-service periods. The manufacturer transforms from being a lift supplier to being a provider of lifts-as-a-service, with an associated recurring income stream, a loyal customer base, and a foot in the door for replacements, upgrades or additional business when the customer expands to a new building.

Whether you want IoT to shape your business or reshape it, for 2018 the future looks like a lift with a jammed button. The only way is up.