The Internet of Things (IoT) has potential to unlock tremendous value for the B2B industry. General Electric has termed IoT as the “Third Industrial Wave”. IoT will help in developing smarter products and smarter ways of operating. It will help evolve new business models and change the rules of competition.
McKinsey in their June 2015 study estimates the economic impact of IoT as 3.9 Trillion USD to 11.1 Trillion USD per year in 2025. As companies start scaling up IoT in their operations, they will be encountering the challenges associated with implementing an evolving technology. The first is “Productivity paradox”, when there is a lag between investment in technology and increase in productivity.
Take an example of an innovative fitness equipment company. They wanted to use IoT to improve customer satisfaction by reducing downtime of equipment. They wanted to track real time usage of the parts and avoid failure. After encountering roadblocks in trying on their own, to build IoT in their products, they started scouting for an IoT service provider who could implement this vision from the drawing board to the thousands of equipment running in customers’ premises.
As the IoT industry scales up, the second challenge is that security of operation (from malware to information breach) needs to be built in at every touch point. This will lead to virtuous circle where regulatory authorities actually become enablers of IoT.
The other challenge in IoT is interoperability. McKinsey study estimates that 40 % of the predicted economic value of IoT will be realized if there is interoperability among the various service providers of IoT. This can be achieved by close working relationships among the various stakeholders in the IoT ecosystem.
Electric Imp, a California based startup, has evolved as a dependable IoT service provider. It has demonstrable success in enabling various IoT business cases over a period of time. It has built enterprise grade security standards in all the components of its operation. The hardware security is achieved in the design stage for all the components. The software security is augmented by a team of experts giving regular patches and instructions.
Electric Imp has exhibited its ability to strike partnerships with Network service providers like PubNub to offer a complete solution. It also has a long term partnership with Quirky, which works with General Electric to facilitate its IoT road-map in “connected homes”.
Thus IoT service providers like Electric Imp have the potential to demonstrate IoT Business cases as “Pilot” and then scale up fast and reliably to capture the benefits of IoT. They offer end to end solutions. This helps the companies to be free for ideation of new product development or new business offerings to differentiate themselves in the competitive landscape.