For years, the Internet of Things (IoT) has been quietly growing on factory floors, in mines, and deep-water oil rigs. This year, IoT spending is expected to increase by 15 percent, to nearly $773 billion.
We can see IoT driving on our highways and saving energy in our buildings. It’s preventing oil spills and telling farmers when to irrigate and harvest. But for the most part, IoT investment has focused on automating existing business processes rather than truly transforming industries by creating entirely new revenue streams and business models.
I think that’s about to change. Here are seven trends that are ushering in a new era of transformational IoT:
- Artificial intelligence, fog, and blockchain are converging to become the key technologies for IoT transformation.
These three technologies will help companies obtain greater value from their IoT investments and overcome previous barriers to broader IoT adoption. AI and machine learning (ML) will enable deeper analysis of real-time IoT data streams to drive better decision making. Fog computing will make such systems scalable by extending cloud capabilities to the edge of the network. By processing and analyzing data flows close to the data sources, fog computing will help address latency, bandwidth, reliability, and cost issues. And blockchain will provide secure, audit-level tracking of IoT data transactions, eliminating the need for a central, trusted intermediary between communicating devices.
- Co-everything is the new normal.
No single player can deliver a truly transformative IoT solution. IoT is driving the “co-economy” – or what I like to call, “co-everything” – model, with companies large and small co-innovating, co-developing and collaborating. A good example is the IoT disaster management solution in Glasgow, Scotland, delivered by a collaborative ecosystem of partners and stakeholders. Cisco brought its horizontal expertise in IT infrastructure, collaboration, and security, along with deep IT industry knowledge. Bronze Labs, (also a horizontal provider) offered IoT software, and Leonardo (a vertical expert) provided high-tech aerospace and defense expertise. They worked with regional players such as Scottish Water and the Glasgow City Council to ensure the project fits local needs. The result is a hyperlocal IoT solution that collects and visualizes data from fire engines, ambulances, and volunteer networks to predict and help coordinate first responders during disaster situations.
- The world is marching toward open standards, open architectures, and interoperability.
Across industries, technology and solution providers are reaching across traditional market structures to collaborate on open standards and interoperability. Horizontal and vertical standards bodies and consortia are working hard to develop common frameworks and architectures. Some of these efforts are starting to converge, fueling the co-everything ecosystem mentioned above.
- Security is the make-or-break factor for IoT.
IoT is not only connecting many previously unconnected “things” in enterprises, it is also causing IT and operational technology (OT) systems to merge. As a result, security weaknesses that were previously walled off from each other can now spread throughout an organization. In fact, 31 percent of security professionals said their organizations have already experienced cyber attacks on OT infrastructure.
Businesses are increasingly taking a unified, policy-based architectural approach to IoT security by involving security and cyber teams from the start to implement a comprehensive strategy across the enterprise. As businesses and technology providers intensify their focus on IoT security, organizations will also invest more in their workforces (in the form of education, training, certifications, etc.) to make them more capable of addressing IoT security concerns.
- Governments are stepping in to regulate IoT security, privacy and standards.
Governments are becoming more aggressive in legislating IoT security, privacy, and interoperability. We’ve already been seeing hints of this. In late 2017, two U.S. senators introduced a bill to strengthen security standards for IoT devices. General Data Protection Regulation (GDPR) is taking effect in Europe next month (and soon will likely be adopted in most other countries). I believe that we’ll see more IoT-specific regulations enacted this year. In addition to security, we will see more focus on regulation of autonomous vehicles, drones and even AI-based systems, all related to IoT.
- IoT is revolutionizing data analytics.
IoT can generate an untold wealth of operational data, and advances in analytics, AI, and ML are turning that data into valuable intelligence. With real-time analytics taking advantage of flexible fog architectures and streaming data properly prepared and ingested at scale, enterprises can make better, faster decisions that lower costs, improve safety, and deliver customer value. For example, using AI-powered predictive analytics, transportation companies can aggregate IoT data from mass transit systems to optimize travel times.
- China is rising as a top IoT innovator and adopter.
As a result of its government’s robust IoT initiatives and investments (such as its IoT Special Fund), increasing maturity of the market and aggressive adoption of IoT technology, China is solidifying its position as a key IoT consumer and IoT innovator. Some experts even predict that of the 200 billion connected IoT devices expected by 2020, 95 percent will be manufactured in China. Other regions of the world can learn from China’s successes and best practices to accelerate their own IoT innovation.
As these trends show, the focus of IoT is moving from enhancing efficiency to creating new business value. Thus far, IoT solutions have been used primarily in business to improve existing processes and infrastructure for greater efficiency and productivity. But increasingly, we’re seeing companies use IoT to uncover new business opportunities, create new revenue streams, and offer new value propositions for customers. For example, by combining IoT with AI and real-time data analytics, manufacturers can predict equipment problems before they occur and conduct preventative maintenance, eliminating costly downtime on the production line. These IoT-powered capabilities can even be turned into profitable new revenue streams, with businesses providing new service-oriented offerings such as equipment health monitoring. In another example, the combination of IoT data with 3D printing is enabling mass customization, with manufacturers able to profitably run “batches of one” and personalize products to their customers’ specific needs and desires.
The transformation is reaching far beyond factories and heavy equipment. Park rangers in Africa are using IoT technology to track endangered animals and prevent poaching of rhinos and elephants. In-home health monitoring is helping seniors live healthier, more independent lives, staying in their own homes longer than might otherwise be possible. Cities are using IoT to monitor and improve air quality, and water utilities are using predictive and prognostic analytics to help them ensure water quality, quickly identify water leaks, and anticipate water use to assure an uninterrupted supply of clean water. Even connected home is starting to move beyond data-capture and stickiness driven connectivity and automation business models into use-cases focused on home security, insurance or elderly care.
As IoT transforms long-standing processes and models, it will not only multiply business value—it just might change the world.