The Time has come for IoT Analytics– Accelerating IoT Market Growth and Business Value

Everyone agrees that the Internet of Things will be a game changer. Gartner predicts that there will be more than 25 billion connected devices in the world by 2020 generating revenues of more than $300 billion for those who catch the wave. While IoT had been growing slowly and was mostly confined to a buzzword up to early 2015, it is easy to see that the tide is shifting. Leading companies are achieving increasing business value from IoT projects completed in 2015, and we see acceleration of the trend so far in 2016.

So what is changing? IoT presents an unprecedented opportunity. Why are leading companies picking up their investments now?

  1. The elimination of technology barriers.
  2. The alignment of roles and removal of organizational barriers allowing cross-functional planning for integrated projects with an increased focus on Analytics and IoT.
  3. The opportunity to develop alternative and extended product and service concepts that build value faster for their companies.

Let’s review each of these trends in more detail and how it is contributing to the acceleration of IoT Analytics.

 

The initial technology barriers have been eliminated

It used to be that most companies were not ready for IoT for technology reasons. They simply didn’t have the infrastructure in place to process big data effectively. Fast Connectivity was essential. Devices, sensors and machines all needed to be connected and then the data from the devices needed to be streamed in real-time to capture device activity. Setting up data so that it could be analyzed was necessary. Now with data lakes in place and more companies having the bandwidth and network communications to take advantage of streaming data, those barriers are mostly behind them.

In addition, technologies like self-service and visual analytics have matured as well. However, one significant missing piece of the puzzle has been a true IoT analytics platform that can provide the speed and automation necessary to capture and act on IoT data rapidly.

This was the critical missing link because without a unified IoT Analytics platform to analyze the data and make it easy for people across the organization to understand what the data is telling them, they cannot act on the information they are getting in the compressed IoT-type time frames necessary to get value from the information before it has expired.

 

Integration of Organizational Roles is also Driving IoT Growth

Think about the key roles in an organization that are positioned to best leverage and drive value with IoT. They are:

  • IT
  • Business Operations
  • Analytics

Of course, the IT folks have a long history leveraging and integrating software and databases. For the past few years they have been trying to figure out ways to get business value from big data. The Internet of Things means adding high volumes of data on physical objects and real-time streaming data to the mix. In addition, in the past, these teams have not necessarily been thinking about adding additional data streams, like weather, traffic, or location, from things outside of their corporate environment.

Organizational Roles can be like puzzle pieces

The business operations folks have a long history of keeping all of the things in their corporate environment running as well as obtaining data from them to manage maintenance and output. While they often take into consideration new information from outside of the traditional IT environment, like temperatures and locations, they don’t necessarily have the IT budgets to connect everything together with software and other tools.

The analytics teams are capable of performing all kinds of in depth and sophisticated calculations to obtain important business insights, but they are limited by the information they have available to them and the project that business people choose for corporate focus and budgets.

In the projects we see at Vitria, all three of these groups are typically working together effectively to create business value from the opportunities in IoT. As they share requirements, communicate about business goals, and learn about the new technologies, we are seeing new types of applications, insights, and information becoming available to their companies. While cooperation between these three groups has always been a useful factor in the past on information technology projects, the complexity of IoT – and especially analytics-related projects – escalates the cooperation requirement to a much high level. Leveraging high volumes of data in real-time to get business insights is a major challenge, and each of these three groups must bring a new understanding of their roles to achieve value in IoT. The successful IoT Analytics projects we see among our customers are bringing this new understanding to the table.

 

New and Extended Product and Service Concepts Can Drive Value Faster

The third major “accelerant” we are seeing in the market is companies that are changing the very concept of their offerings to maximize the value creation associated with their IoT and Analytics initiatives. Most IoT projects start out tied to the product or piece of hardware being measured or “sensed” – this is the “Internet of Things” after all. The analysis of that sensor data is certainly valuable for its own sake.

Nevertheless, it is often the case that this information flow can serve as the basis for an ongoing service-centric economic model vs. simply maintenance of product or hardware centric models. Sometimes called “Servitization” in the past, IoT is a true game changer for companies who are looking to create long term customers vs. just one-off transactional product buyers. The rich information flow of IoT enables companies to offer information services and clearer value propositions. Advanced manufacturers such as Ross-Royce have been doing this for years. We believe that IoT combined with analytics will enable many more manufacturers to do it in the future. Here is a good example where Verizon lays out the trend in this short piece.

 

Putting it all together to Drive Value

Achieving the move to “Servitization” is not simple. We outlined above that companies need to get IT, business operations and their analysts working together effectively to get value from IoT.

It is apparent that any movement by product manufacturers towards services will be slow if traditional functional roles are not adjusted. All three of these groups must work together. The IT group needs to start thinking about all the security and related issues associate with delivering new data to customers that was previously only available internally. Operations managers and sales teams need to re-conceive even the offerings themselves to ask if they are delivering the value proposition that customers will expect in the IoT era. And analytics professionals need to educate both of the above groups about what is possible with real-time analytics and the flood of new analytics tools and technologies coming into the market.

 

Unified IoT Analytics Platform is the Final Critical Piece

Unified IoT Analytics Platform is the Final Critical Piece

Some of the technology necessary to turn products into services, is already available. The one critical, missing piece is an IoT Analytics Platform able bring all of the data together in a format where it could be visualized by everyone involved across the organization.

This platform would need to be:

  • Powerful enough to make real-time predictive and prescriptive analytics possible.
  • Flexible enough to allow data from multiple places in the organization to be easily integrated with powerful analytic tools.
  • Strong enough to utilize information from not just one outside company, but also have the ability to integrate other sources as well.
  • Smart enough to automate some of the easy, repetitive decisions, as well as have the capabilities to allow someone to program more complicated dependencies within their decision making automation.

Vitria’s IoT Analytics Platform meets all of the above requirements. By offering a unified analytics platform, Vitria can enable companies to overcome their technical and organizational barriers and to drive value with their IoT data. Our Platform allows functional teams to have access to a complete and flexible system that can assist them to begin or continue their journey into the world of “Servitization”. This has proven to deliver increased value for their customers and as well as improved business performance.

Getting business value from IoT is not as complex a journey as it may seem at times. Many of the technical and organizational barriers have been overcome and our now understood. Product companies are accelerating the process of transforming their businesses into service focused business models. And platform’s like Vitria’s help to simplify and accelerate analytics for IoT – a key enabler to driving the product to service transition.

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