Winning IoT Isn’t About the Analytics of Things, It’s About the Analytics of Your Customers

Written by in Strategy on

Thomas Davenport, one of the most brilliant minds in contemporary business analytics (and author of one of my favorite books, “Competing on Analytics: The New Science of Winning“) has popularized the term the Analytics of Things (AoT) to refer to “new” practices of analytics that are enabled by the streams of data created by IoT devices.  These practices are focused on devices’ (and their services’) ability to use analytics to serve their owners in two contexts: using external “analytics” to drive device output when the devices are connected to the internet and having the ability to take local sensor inputs to control the devices’ behaviors when they aren’t connected to the internet.  As an example (which I lifted from this article), the Nest thermostat provides insight to its owner on usage when connected to the internet, but also has “internal analytics” which triggers thermostat responses based on a home’s occupancy (or lack thereof).

While these are interesting and important concepts when it comes to IoT product design, the companies that are going to “win with analytics” in the consumer IoT space aren’t going to do so purely on sensor data, but on an overall customer data strategy that informs both their product development and marketing activities.  The major missing piece of the discussion of the AoT as it relates to the consumer device sector is how these devices will enable feedback loops to the business, allowing the companies that build them to leverage device data to drive business outcomes.  The ability to execute on customer data will make or break a lot of device manufacturers.

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