IoT Is Coming -- Slowly but Surely -- to an Enterprise Near You
How many organizations are actually making meaningful use of IoT data?
- By Steve Swoyer
- May 9, 2016
If enterprise investment is any indication, the Internet of Things (IoT) is still in its infancy.
That's one conclusion from State of the Market: Internet of Things 2016, a new report published by Oxford Economics and commissioned by network services giant Verizon Inc.
Almost all organizations now have access to IoT signalers of one kind or another, be they connected devices (sensor-equipped environmental controls, manufacturing equipment, telemetry signalers, etc.) or sensor-enabled assets, such as cars, trucks, and engines.
How many organizations are actually making use of this data, however? More to the point, how many are making use of a meaningful proportion of it? Oxford Research and Verizon figure that "meaningful" in this context works out to using at least 25 percent of IoT-generated data.
On this basis, very, very few companies -- eight percent, in all -- are doing much with IoT.
The good news, however, is that organizations are hip to the importance of IoT. They get it.
Of companies that are making at least some use of IoT, almost half expect that they'll meet the 25-percent threshold for data collection and analysis in three years or less. Not surprisingly, revenue growth is a key driver for these firms, according to Oxford Economics and Verizon. Respondents to their survey cited the potential to monetize new products and services, as well as to drive down costs.
State of the Market explores several compelling use cases for IoT, including supply chain optimization. It projects that "virtually all industries will be inundated with a deluge of IoT data." It's one thing to collect and process this data; it's quite another thing to put data (specific events, anomalies, signatures) into context. This requires a different kind of contextual analysis.
Marcia Walker, a principal consultant for energy and manufacturing with advanced analytics specialist SAS Institute Inc., uses an example from manufacturing to illustrate what this entails. "People tend to do equipment maintenance on the basis of periodic intervals. Prior to the industrial IoT, nobody could definitively say that this one machine had been 'used harder' than other machines, or that it requires more lubrication, or that there was a power surge on it," she says.
"The Industrial Internet of Things allows us to have much more granular data about what's actually happening on the factory floor. Maybe there's this correlation such that whenever factors X, Y, and Z are brought together, the machine is more likely to break down within six weeks. These other machines didn't have the same conditions, so you can save money on maintenance."
To establish that connection, a manufacturer must collect and synthesize information from a myriad of signalers. Walker notes, for example, that a single factory floor could be home to tens of thousands of sensors or telemetry devices. Information from all of these signalers must be contextualized.
For this to happen, data scientists, statisticians, business analysts, and other cognoscenti must first experiment with data prep, predictive models, algorithms, and rules. As relationships and correlations are contextualized, events -- insights -- emerge from this context. It becomes possible to model a richer, more interconnected world.
Another use case, also involving a deluge of data, is that of the so-called connected vehicle, or CV. Verizon and other vendors are especially keen to promote the CV. Not only is it basically a new medium unto itself -- a self-contained context for purchasing and consuming media and services, and a comparatively captive audience for advertisers -- it's also liable to be a huge consumer and generator of data.
According to one estimate, CVs are already generating over 1 PB of data per day in the United States. For a company such as Verizon, the CV is a huge opportunity. Part of the State of the Market report flags Verizon's upcoming launch of 5G service for the automotive OEM market.
Cellular data carriers and automotive manufacturers aren't the only potential beneficiaries of the CV, however. Take SAS, which is no less bullish on the IoT-enabled car.
"This is about being competitive and relevant at a very high level. You have a lot of competition if you're a car company because other tech firms want a piece of the action. There's a lot of disruption taking place, and ... Apple and Google want to get into the auto business," says Lonnie Miller, a principal industry consultant with SAS.
"Fundamentally, it starts with the data and because of all this [monetization of new services] creates an incredible number of data points. The onus is on [companies] to use this data to take advantage of this disruption or proactively to take action against competitors. It's a big opportunity for companies like us. We can help. This is our specialty. This is what we're known for."
This is just scratching the surface, according to the Oxford Economics-Verizon report. It might sound hyperbolic or hubristic, but it isn't; IoT will radically transform virtually every aspect of everyday life.
State of the Market is concerned primarily (almost exclusively) with the consumer society of developed countries. It's no less true, however, that IoT will be a transformative force in the very different context of the developing world. There the emphasis will be less on consumption and monetization and more on -- something else.
That's the thing with IoT: we can't say with any certainty how it will change the world as we know it -- only that IoT will be a force for change.
Stephen Swoyer is a technology writer with 20 years of experience. His writing has focused on business intelligence, data warehousing, and analytics for almost 15 years. Swoyer has an abiding interest in tech, but he’s particularly intrigued by the thorny people and process problems technology vendors never, ever want to talk about. You can contact him at email@example.com.