Imagine your life without internet for a day. As soon as you wake up, you reach over to check your email on your phone. No service.
Though you plan on making coffee, you have a “smart coffee maker” that is synced to your Fitbit to turn on as soon as your circadian clock emits an internet signal to your coffee maker that you are awake. No pre-made coffee when you get out of bed.
After manually making a pot of coffee, you open your laptop to check the news. Again, no service. Now you start to get jittery. You may have an internet problem.
Now that your 6 AM coffee is ready (20 minutes later than usual), you turn on the TV to the local news to discover that cloud services are down.
This scenario is a very real problem for businesses that are in the business of selling internet connected devices. When Amazon Web Services went down, for example, software-as-a-service businesses like Slack and Trello were interrupted. Think about that for a moment: millions of customers and thousands of businesses that use Slack and Trello’s services were affected because those software companies are reliant on Amazon’s cloud service. When Amazon’s web service went down, critical workflows powered by Trello and Slack were disrupted.
At this point in our technological evolution, an internet disruption is a life disruption.
The next stage in the internet’s evolution is the Internet of Things (IoT). As much as it impacts individuals, IoT will challenge the ability of organizations to adapt to a world where everything can be a “smart device,” from a car to a pacemaker.
Businesses must understand how IoT applies to their business. Is IoT a threat or is it an opportunity?
Purchasing cloud-based technologies, embedding and enabling internet connectivity in your products and services, and integrating internet devices throughout your company are far from cheap and quick. Additionally, sifting and analyzing all the data streaming forth from IoT technologies will demand time and resources from your employees. That means you’ll have to spend more money.
So is it worth the headache and dollar signs to discover how IoT can affect your business?
You bet. By investing in the short term you’ll capture a windfall in the long term. The more that we can incorporate sensors and connectivity, the more that we can mine data that creates predictive information.
The Internet of Things cuts through the Gordian knot that has tied up businesses ever since e-commerce took off in the 1990s. It provides a new platform for finding customers that are hidden in the dark matter of the internet.
The Internet of Things Is Another Way of Saying That the Internet Is Connected to Everything
The IoT is a microcosm of how we as individuals are connected to the internet. As the internet has permeated nearly every aspect of our personal lives, new value chains will be unlocked for businesses. The IoT is the realization of the technology that infused the world of Blade Runner. It marks the convergence of pop culture and science fiction as connected devices have proliferated over the last 10 years. As the number of devices connected to the internet increases, we will see an increasing convergence of people’s personal lives and business innovation.
IoT enjoys a symbiotic relationship in the cloud software space (another disruptive juggernaut). Tech giants like Google, Cisco, IBM, Verizon, VMware will continue to build and improve their IoT clouds in 2017. This should make you even more bullish on IoT technologies.
Large businesses are embracing the predictive, connected IoT platforms. IBM has the Watson Developer Cloud and Watson Internet of Things. Microsoft’s Azure IoT sells a suite of features that connects devices, integrates business systems, and offers a new source for aggregating data. Microsoft is already planning for a future where its IoT suite will allow cars to be linked to one another, to infrastructure systems, as well as to offices and homes.
By leveraging predictive information, devices like Microsoft’s Cortana reduce friction and make people’s lives easier. Humans are not designed to manage to-do lists. We are designed to solve complex human problems. The more that we can apply our cognition to solving complex problems, then the more we can automate the mundane to invent the insane.
Imagine this situation in the not so distant future. You have a 10 AM meeting in downtown Manhattan but there was a car accident on the George Washington Bridge. Cortana will be able to notify you that you’ll have to leave the house 30 minutes earlier than usual since you’ll need to take the Holland Tunnel instead (even though you weren’t thinking about checking the traffic report). All of a sudden, you’ll be driving by stores that are not part of your regular route. Businesses understand the language of intent. Digital body language, whether it be where you are going and how you are functioning, will allow businesses to predict what you might want to do. These businesses now have an opportunity to connect with a new customer. Hey, you might like what you try so much that you end up taking the longer Holland Tunnel route.
Organizations cannot ignore the relationship that humans have with the internet any longer. But whereas businesses like Facebook, Google, Microsoft, and Amazon are experts at collecting and monetizing the data streaming forth from our devices, others have not yet discovered the secret recipe for transforming this treasure trove of data into a revenue stream.
The internet is the future of how we connect as a species. Humans are hardwired to form connections. Organizations that fail to incorporate internet services into their business model are in danger of extinction.
The IoT Challenge
Part of the challenge of IoT is recognizing how it affects your business model. Disruptive innovations are a 2-way road. Disruptive innovations can harm as well as reimagine your value chain.
It’s one thing for my smart coffee maker to malfunction due to an internet outage. But what happens to businesses when they lose internet? The costs for, say, a construction company that loses their internet connection for three hours and can’t fill orders can mean the loss of hundreds of thousands of dollars. On the flip side, contractors who need to request the equipment will lose precious hours of construction time if the rental company’s web server is down. Organizations throughout the world lose revenue when their cloud powered workforces are disconnected. No doubt, infrastructure and cybersecurity are a big concern for the future of IoT. The solution? Stay tuned. If a device is connected to the internet, it can be hacked. Since so many more devices are connected and will increasingly be connected, we will be at more risk of being hacked than ever before. This is why cloud cybersecurity and cloud architecture are huge growth industries.
Digital transformation has made it more challenging for businesses to connect with customers. However, digital transformation also affords new opportunities for brands to reach out to consumers in ways that were previously only found in pop culture and science fiction movies.
The connected home, the connected car, the connected workplace, the connected human all add up to the connected world.
The Internet of Things allows us to connect and take inputs that were previously impossible to gather such as input data, sensor data, location data, and decision data. The more that we can understand people’s decisions and behaviors from their watches, their cars, their homes, even their bathrooms, the more we can gather and interpret real time insights. What people say and what they do are two different things. We are not far from the point where you will learn about potential opportunities to connect with new customers simply through the data accrued by their sensor data. If I own an elevator company and sensors indicate that the lobby is full, I can automatically dispatch elevators to go to the floor where elevators are needed. From connected buildings to connected marketplaces, everything is connected.
Our cars are increasingly connected to the internet which transmits data to the cloud through sensors. Filters can be applied to this data to determine, say, a customer’s typical driving route on Saturday from 9:30 AM to 11:45 AM. If John Doe drives to a coffee shop every Saturday at 10:30 AM that happens to be next door to a clothing store, the store can use this information to generate a new lead and potential customer. Furthermore, if the store knows the age of John Doe, by buying third party data sources it can store the information in a data warehouse or a DMP. The clothing store can then send John a highly personalized, one-to-one message that connects the story to his life in a way that motivates him to change his behavior. Behavior change is the single greatest change that brand managers and marketers face today. But through experiences, better services, and pain point remedies, you will give potential customers the opportunity to shift. Though many companies don’t realize it, IoT can revolutionize how they find, access, and communicate with their current and future customers.
The Future of IoT: a Renaissance For Brand Relationships
Where IoT will be 10 years from now is even more exciting. Let’s say you own a soda water business that has been around for over 50 years. If you could embed an electronic sensor connected to a cloud service into the 12 pack carton as well as the can itself, you would get a 360 degree view of a customer’s consumption habit. You could track when the consumer was drinking the last soda water in the carton and when his drink was almost empty. More importantly, if you can connect customers to their behaviors on social media and you can connect with those customers through their posted photos, you can start to understand new flavor ideas. Instead of losing customers, you can innovate on your products based on interests and ideas that they are sharing with friends and family. At the moment of the final gulp, you could text that customer an ad or a coupon to “save $1.50 if you purchase another carton in the next 24 hours.”
The beverage company can leverage IoT to get data about how quickly actual human customers consume their product, to know when they need to send an advertisement, and build a brand relationship (a huge challenge as traditional advertising has become less and less effective). The more that you can connect and personalize someone’s experience the more you can disrupt a market.
One of the main insights I have garnered from Clayton Christensen’s work on disruptive innovation is that disruption should not be a four-letter word for a company (anymore so than digital transformation should be). Internet of Things and other disruptive forces are opportunities for large, veteran organizations to reinvent and reimagine their supply chains and customer relationships.
Innovation can happen on the brand, product, experience, and service level. That will allow businesses to create incremental innovation that drives bottom line shareholder value.
You don’t have to be the next Uber to succeed in your marketplace. But if you are not heavily invested in a connected brand experience, you will be displaced. “Connected” is what is driving today’s world.
Will it be a smooth process to adapt IoT to your business? Probably not. But with the right help, it will only be slightly more disruptive than waking up in the morning with an hour-long internet outage.
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