September 17, 2016

The graphic for this post is taken from the article “The IoT is Not a DIY Project”, Desktop Engineering, June 16, 2016.

OK, I’m connected.  Are you really?  Do you know what completely connected means?  Well, it does appear the numbers are truly in.  The world’s top research firms and business technology prognosticators all agree that the Internet of Things or IoT, is growing at an amazing pace.  This very fact indicates there are new revenue models for business that any executive would be extremely foolish to ignore.  The possibilities for additional revenue streams is staggering. Every design engineering team across the globe has been asked to design products that build connectivity into their structures and operating environments.  Can your product “talk to and through the internet”?   To prove a point, let’s look at several numbers that represent reality.


This IoT chart indicates where we are and where we might be going over the next few years and decades. Over six and one-half billion, (6.6 billion) connected “things” by the end of 2015.  Everything from refrigerators to automobiles is in the process of being connected or will be connected to the internet.  This connectivity allows communication from the device to the user of the device.  This connectivity can tie the device to GPS tracking, thereby detailing its location down to mere feet, if not inches. (NOTE:  The desirability of this feature is somewhat in question but it is definitely possible.)

Imagine, $1.3 TRILLION in world spending by 2019 to accomplish connectivity of hardware with the internet.  This is a prediction by IDC Technologies. (IDC Technologies, Inc. is a Premier Technology Services Organization with primary focus in IT services. A very capable organization devoted to following IT services and market demands for IT services.)  This huge number reflects the fact, as shown above, that forty percent (40%) of the top one hundred (100) discrete manufacturers will rely on connected products to provide equipment and services to customers by 2018.

Now, connectivity does not come freely or without barriers. Some of these are as follows:

  • THE NEED: It’s all about the business. IoT is a classic example of organizations needing to take a step back and determine whether there is a strong business case for pursuing IoT before they get on board with implementation. Championing IoT simply because it’s the latest technology may be enough for engineers, but it means nothing to customers or the company’s financials unless there is a smart business strategy to back it up. The customer DRIVES incorporation of IoT into your product or your service.  If the entity does not need IoT—DON’T DO IT.  Who need a refrigerator that communicates with the internet?  Maybe yes—maybe no.
  • Resources don’t come cheap. IoT commands a great deal of expertise in areas where most companies are lacking. By some estimates, it can take over one hundred and fifty (150) months of manpower and an investment in eleven (11) unique long-term roles to sufficiently develop and support a full IoT-connected product development stack. Most companies evaluating the IoT space aren’t software development or connectivity experts and would be better served focusing engineering resources on core competencies. IoT for even the largest company is a definite commitment.  You probably cannot do-it-yourself in your spare time.  Don’t even think about it.
  • Growing pains come with scale. Even if the initial IoT implementation goes off without a hitch, scaling the system to accommodate a larger universe of “things,” additional features and product lines typically brings new, unanticipated challenges. It’s critical to make sure your system design is future-proofed from the start, and building for scale adds complexity to an already complex project. Plan for the future and future expansion of IoT.  Things in the business world generally increase if immediate success or even partial success is accomplished.
  • Security is a top concern. There are multiple vulnerability points in an IoT system, and many engineering organizations don’t have the internal expertise to address them sufficiently. Rather than staffing up a dedicated security organization, companies should consider aligning with external partners with proven, connected product security expertise. To me, this is the greatest concern. We read every day about web sites and digital systems being hacked.  It still represents a HUGE problem with the internet.  Encryption to lessen or eliminate hacking is a definite need.
  • Identity management challenges. Related to security, this is a critical step to ensuring users can control their own IoT devices, and there are limitations on who can make changes or initiate updates. Again, it’s an area where many engineering organizations lack sufficient competency.
  • Data deluge. Connected products spin off a massive amount of data, which requires competency in data management practices and new Big Data technologies. Not only that, but the IoT data needs to be organized and integrated into existing business systems. For engineering organizations light on data management manpower, this can be a problem, not to mention, a huge impediment to the success of any connected business. Data organization is the great need here.  Mountains of data can result from IoT.  Determine what data you need to further your business and improve customer service.  I feel the 80/20 rule might apply here.
  • Long-term maintenance. If you build an IoT system on your own, you’re probably going to have to support it on your own, which requires an additional investment in manpower. A system built in-house will require frequent updates over the course of its lifetime, which can quickly eat up entire budgets and consume already stretched engineering resources. Remember, if you build an IoT system you MUST maintain that system—always.
  • Time-to-revenue delays. It takes time and effort to build these systems from scratch, and every hour spent on engineering prolongs development and increases the time-to-market cycle. Companies trying to ride the IoT wave need to get products into the hands of customers as soon as possible to stay abreast of competition and maximize financial gain. I cannot stress too much the need for focus teams inquiring from potential customers their wants and desires relative to incorporating connectivity into products and services.  Ask your customers up front what they want.
  • On-going interoperability requirements. Maintaining full control of the IoT technology stack also means being responsible for on-going integration requests and keeping up with continuously changing standards. As the connected product business matures, this can be a lot of work that could be handled more efficiently by a third party.
  • Service distractions. The work involved in managing in-house solutions can distract from one of the more important advantages of IoT: Gaining a picture of product usage and customer requirements that can be leveraged for optimized, proactive service. If companies are spending all their time troubleshooting their own IoT hardware and software, they have less time to devote to customers’ problems or growing their IoT-enabled business.

If I were a stock trader doing business with the markets on a daily basis, I certainly would address those companies “folding into” and providing services to IoT methodologies.  Also, businesses need to listen to their customers a gauge the importance of incorporating internet connectivity into the products and services they provide.  This, apparently, is the way business is going and so as not to be left out or lose your customer base, you may have to yield to the wishes of your clients.  Just a thought.

As always, I welcome your comments.

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