IoT Technology: A Platform for Innovation, But Not a Market

“The world is the totality of facts, not of things.” —Ludwig Wittgenstein

Imagine it’s 1993 and a friend of yours calls you up excitedly to say he hopes to get rich off of the internet. You would be right to have been skeptical. Most simplistic ideas launched in the web’s early days would fail and the dot-com crash would go on to erase some $1.7 trillion in market value. But several companies that debuted in the mid-1990s, among them Amazon, eBay, Google, Netflix and PayPal, would ultimately prove the feasibility of launching transformative online business platforms and help change the global economy. At present, tech firms make up 26 percent of the S&P 500.

The early wave of hype surrounding the Internet of Things is similar to the early buzz of the World Wide Web. Although the term “Internet of Things” likely dates to 1999, it first became mainstream approximately five years ago, thanks in part to strong support from tech and telecom companies like Ericsson and Cisco beginning around 2010, both which helped popularize the notion there would be 50 billion connected devices by 2020.

Fast forward to today, and we see Internet of Things adoption is not happening as many initially expected. We hear that many IoT proof-of-concept projects are running into delays if not outright failing. Prominent analyst firms have trimmed their projections for IoT deployment to less than half of the original estimate of 50 billion. A 2017 McKinsey survey helped popularize the notion that many IoT projects are stuck in pilot purgatory. They are not alone in that assessment: dozens of industry colleagues, consultants, executives, system integrators and customers we’ve spoken to agree that IoT technology is failing to drive the level of business growth they expected.

Putting Outcomes First

There are multiple reasons for the relatively slow uptake of IoT, but the chief reason is many people continue to mistake IoT as a market unto itself rather than a concept supporting business possibilities. And the driver of value of IoT lies not in the “internet” or “things” per se, but in the outcome-focused applications they enhance with contextual data.

In the end, your customers don’t care about how many IoT projects you’ve deployed, how much you’ve invested in them, or how much time it took you or to learn how to use a new piece of software that allows them to access IoT data. Ultimately, they want what they always wanted: a defined business outcome. If your IoT technology can help them achieve core business outcomes more efficiently or effectively via software they are already familiar with, it has a good chance of succeeding. This is true, regardless of which industry you look at: from manufacturing to transportation to utilities to energy.

Read more…..