Paraphrasing Marco Ryan, CDO of Wärtsilä: “IoT is not new, Wärtsilä has been putting sensors into its products for an extended period.” The Internet of Things (IoT) or the Industrial Internet of Things (IIoT) are as such no new developments but they are enjoying increased attention from all industries, geographies and functions. While IoT provides a major opportunity to change operations, services and products it is often misunderstood as “putting sensors into everything”. True value of IoT is not in the sensors or data but in the business results!
Sensors can today collect a broad range of measures, e.g. temperature, humidity, movement, location, and light. In complex products, various components will collect independent and correlated data. As a result, companies will collect massive amounts of data that is often being stored in the cloud for future reference and processing. This data can be further combined and enriched with external data sources, e.g. weather, terrain information, etc.
Some of these data sources will provide value right away whereas other data elements might not bear any immediate relevance and as such will be “waste data”. As storage costs have been and will be further reducing, it often makes sense for companies to store all data for future usage as you do not always know what business questions, problems and services will be providing your next revenue stream.
With analytics, big data and artificial intelligence capabilities rapidly developing, companies should become data hoarders as this data will be a critical ingredient for new products and services. Different from the compulsive hoarding of objects that cover the living areas of the home and cause significant distress or impairment, the hoarding of data in the corporate context requires a clear, data centric business and technology architecture.
Your data waste may be someone else’s goldmine
There are today two main usage approaches, either the data is used immediately for local processing or it is uploaded into a central storage or cloud for future utilization. Often both are done.
In many cases the data is used for internal purposes incl. e.g. operational improvement, quality assurance, (predictive) maintenance, management decision making or performance improvements. While such usage will enable significant value, it does not maximize the overall data utilization and monetization. Making data available in an open data platform to an ecosystem of employees, start-ups and other 3rd parties (e.g. registered users / companies that have a signed NDA etc.) will go beyond traditional data usage models to develop new services and innovations in operations, product development and service design.
Monetization in these models can be achieved through e.g.
- monetization of data
- old data is available for free while new data is provided at a cost
- raw data is available for free while structured and enriched data is provided at a cost
- usage rights of developed solutions
- partial or full IPR of developed solutions
- indirect revenue from users that access a company’s services through the service of a “data-partner” (e.g. public transport planners)
As such, IoT provides significant value for companies beyond the immediate use cases within the enterprise. It requires though a new way of thinking about data and open data architectures.
AI and IoT – a love story
In addition to the immediate usage of data, IoT provides the foundation for Artificial Intelligence (AI) as it gathers a sufficient data base for enabling AI to identify patterns, learn new capabilities and for automating operations, decision making and new / enhanced services. The combination of IoT, Analytics and AI will enable the next wave of services and products while delivering unprecedented efficiency gains.
So, who owns the data and who gets to see it
As more and more data is collected and stored, security & data privacy considerations are gaining increased importance. No day passes without news about smaller and larger security breaches that impact all of us. Companies need to drive the right level of security & data privacy measures to ensure the data while not unnecessarily hindering its usage. It’s a fine balance that we have also outlined in an earlier blog post: Keeping Doors Open and Closed at the Same Time
While IoT is not new, it provides significant potential for efficiency gains and future revenue for companies across all industries. Unearthing this potential will require much more than embedding sensors into things and collecting large amounts of data. It requires companies to consider a data centric model for collecting, using, provisioning and monetizing data internally as well as across a wider ecosystem.