The Internet of Things (IoT) is rapidly connecting our world, bringing with it a deluge of new information collected from devices and sensors that will rapidly create new business models - and have a huge impact on traditional ones.
IoT and big data are a formidable team indeed. Gartner estimates that in four years there will be 20 billion connected devices, all designed to collect, analyze and share data. In the same time period, more than half of major new business processes and systems will include some element of IoT.
IoT is driving digital transformation. It has the power to create new revenue streams, cut costs and increase productivity by redesigning operations and simplifying processes. Industry has been using the concept of IoT for a long time, only it has been referred to as machine-to-machine (M2M) communications. This is where machines have used networks to talk to remote application infrastructures. IoT goes a step further – interconnecting smart objects and outlining how we interact with them.
More has been written about IoT’s potential in the business-to-consumer market place, thanks to developments such as Google’s purchase of Nest and its vision of the smart home. But, there is more value in business-to-business markets. IoT is providing business with a real competitive edge. If a company is first to market with an innovative IoT product, it gives a real advantage.
Unlocking big data
IoT will have an impact on the entire value chain – disrupting existing business models and creating new ones. At the same time, we will see data hit petabytes in many organizations as connected devices churn out more and more information.
Companies will need to ask themselves what new business models they can deploy to compete, how they can adapt existing ones and how they can build organizational structures that will optimize their performance by best using the data they are gathering.
Some vertical industries have been very early adopters of IoT, analyzing and monetizing data. Automotive makers for example have been pushing information to insurance companies, enabling them to provide usage-based insurance. Mileage and driving behaviors can be tracked using equipment installed by car makers.
Some car makers are looking at bypassing insurance companies and using their data to sell insurance themselves. Here we see IoT triggering a transfer of business model that is opening up a whole new market opportunity.
Through Nest, Google is collecting huge amounts of data about people’s lives. In the future, it could use this to sell home insurance or energy, for example. Being able to analyze, understand, and even predict, human behavior is an extremely powerful resource and one that IoT is helping to activate.
Analyzing IoT big data is key
The appeal of IoT is that it generates huge amounts of data. But, the majority of organizations just aren’t using it. It is estimated that just 1 per cent of data collected is used, the rest is thrown away or left to reside in a cloud unused.
These organizations are missing the point and will get left behind if they don’t get wise to the fact that big data is where the monetization of IoT really is. Understanding it and analyzing it is the future of IoT.
To this end, we developed the Datavenue ecosystem linked to a cloud infrastructure, which can collect and analyze data from anywhere. This IoT and data analytics modular offering really is only limited by our imaginations. We have been working closely with the French tourist board, for example, collecting data from cities, anonymizing it and using algorithms to predict the footfall in a specific place of interest.
You may ask why we need to anonymize the data? This was to comply with the Commission Nationale de l’Informatique et des Libertés (CNIL), which ensure that French data privacy laws are followed. The upcoming European Union General Data Protection Regulation (GDPR), which comes into force in May 2018, should provide a common framework for data protection measures in Europe. Orange is making sure works within and adheres to the GDPR guidelines.
IoT security is critical
When we look at the huge potential that IoT and big data brings, we also should mention security as it is crucial part of the ecosystem. Security is often seen as one of the barriers to the advancement of IoT, but we should actually see it as a positive. It is making us all much safer.
Many companies say they are secure, but are they? We’ve already seen IoT attacks happen. Take the Denial of Service (DDOS) attack against DNS services provider Dyn, which saw the company’s servers swarmed by a large number of hacked IoT devices, including DVRs and Webcams.
Discussion around IoT and security are very much like cloud was several years ago. Companies didn’t want to put data in the public cloud. They did not trust it then but now they do. That same element of trust is necessary with IoT, and it is happening slowly. It is up to the industry to establish user confidence in IoT.
The road to IoT
Most vertical businesses are now on the road to IoT, some are more advanced than others. IoT is central to their digital transformation – helping them improve productivity and efficiency, while better understanding their customers.
But to succeed they must realize that IoT and big data are strategic partners. IoT is the engine, big data is the big value, providing invaluable insight to take business models forward and open up new opportunities. But don’t forget, this data needs to be secure.
Learn more about how Orange Bussiness Services can help you reinvent your business using IoT and Data Analytics here
Thierry Evangelista is in charge of Global Portfolio & Roadmap Group within the Strategic Marketing Division. His team is in charge of optimizing Orange Business Services' portfolio and proposing new product development opportunities for the company.
Prior to this role, Thierry was Marketing Director for Orange Security Business Unit - heading up the product marketing and business development teams.