Dramatic Business Transformation Ahead: The Internet of Things Takes Shape

by Paul Korzeniowski
July 13, 2015

Webpages, ecommerce, search, social media, Twitter: The list of items that have changed how business is conducted as the Internet has evolved through the years is long and their impact monumental. Well, the next significant development, the Internet of Things (IoT), is about to take shape, and some observers think it will have the greatest impact of all. “The Internet of Things (IoT) will change companies’ internal processes as well as the products and services that they offer to customers,” states Alfonso Velosa III, research VP over the Internet of Things at market research firm Gartner, Inc.

However, the path from theoretical concept to practical application is often littered with potholes, detours, and delays, and the IoT infrastructure seems to be no different. Currently, much of the computing foundation is missing. Applications and infrastructure software has to be built to add those capabilities to different systems. Security functions need to be integrated into these systems. Businesses must have tools to manage these devices. In sum, a lot of work remains.

But these voids are slowly being filled. As companies deploy these solutions, internal and external communication will increase. As interactions grow, miscommunication will occur, and the need for support services will rise. “The IoT will have a huge impact on IT support,” says Vernon Turner, SVP and IoT research fellow at market research firm IDC. Service providers must start getting ready for the onslaught.

What Are Things Anyway?

The term “Internet of Things” was popularized by Kevin Ashton, a British professor at MIT. At the turn of the millennium, he envisioned vendors embedding intelligence into physical objects (basically, anything that could support a sensor) and connecting them via networks. The concept is broad, so a precise definition is lacking. “The Internet of Things is a network of networks of uniquely identifiable endpoints (or ‘things’) that communicate without human interaction, typically using IP connectivity, be it locally or globally,” notes IDC’s Turner.

As companies deploy IoT solutions, internal and external communication will increase. As interactions grow, miscommunication will occur, and the need for support services will rise.

Each thing is unique and identifiable, so it can be pinpointed and its actions monitored. In addition, the things have varying levels of intelligence, so they can be controlled remotely or collect information and relay it to central systems triggering various actions. As the things are put into place, companies build computing infrastructures that support a high level of automation and usher in a new era of intelligent communication that replaces the manual tinkering typically done with dumb end points nowadays.

The potential applications and benefits are myriad. Business models today are based on largely static information exchanges and rigid processes. The IoT enables enterprises to monitor interactions and respond to market dynamics in real time.

Boosting Marketing and Sales

For instance, the technology can improve marketing and sales. Customers’ buying preferences are sensed in real time. By better understanding how often and how intensely a product is desired, businesses create additional buying options—say special discounts or usage fees rather than set purchase prices—that lead to more purchases.

After they monitor customer interactions, businesses evaluate buying patterns and present their merchandize to consumers more effectively. In retailing, companies gather data from thousands of shoppers as they journey through the stores. Sensor readings and videos note how long they linger at individual displays and record what they ultimately buy. Simulations based on this data increase revenues by optimizing retail layouts.

With IoT, companies change consumer behavior. Networked sensors and automated feedback mechanisms enable utilities to offer pricing incentives to customers, change usage patterns—especially during maximum usage periods—and reduce the need for scarce resources, such electricity and water. Utilities, such as Enel in Italy and Pacific Gas and Electric Co. in the US, deployed smart meters that provide residential and industrial customers with visual displays illustrating energy usage and the real-time costs of providing it. Based on time-of-use pricing, customers shut down air conditioners or delay running dishwashers during peak times, lowering demand on the grid as well their own energy bills.

Monitoring Driving Patterns

The IoT also enables corporations to charge for their services in new ways. Insurance companies could put location sensors in customers’ cars. The insurer tracks how far and how safely the driver travels and base rates on the driver’s actual behavior rather than proxies, such as a driver’s age, gender, or place of residence.

Internal improvements also are possible. Collecting data from large numbers of sensors enables companies to make decisions based on a heightened awareness of real-time events. Logistics managers for airlines and trucking lines receive up-to-the-second knowledge of weather conditions, traffic patterns, and vehicle locations. After evaluating the data, these managers adjust routing that speeds up delivery.

A lack of clear cut standards for the IoT is just one vexing issue among many.
Tweet: A lack of clear cut standards for the IoT is just one vexing issue among many. @ThinkHDI http://ubm.io/1CWHLN8+

Manual processes can be automated. IoT solutions oversee real-time conditions and trigger preconditioned responses of automated systems. Industries, such as chemical production, are installing legions of sensors to bring much greater visibility and granularity to monitoring of complex systems. Sensors collect usage and performance data, computers analyze the information, and then signals are sent to actuators that adjust processes. In the pulp and paper industry, the need for frequent manual temperature adjustments in lime kilns limits productivity. A company can raise production by using embedded temperature sensors whose data automatically adjusts a kiln flame’s shape and intensity.

Putting the Brakes On

The automobile industry is stepping up the development of systems that detect imminent collisions and take evasive action. Applications, such as automatic braking systems, are making their way into high-end autos. The potential accident reduction savings from wider deployment could surpass hundreds of billions annually.

Because of the many benefits, there is little to no doubt that the IoT is coming. In fact, the market potential is vast and the possible growth is staggering. A Gartner report predicted there will be 4.9 billion connected things in 2015, rising to 25 billion by 2020, while the IDC expects IoT solutions revenue to grow from $1.9 trillion in 2013 to $7.1 trillion in 2020.

But in many cases, the emerging technology is new and faces a number of deployment challenges. The underlying infrastructure has to developed, tested, and deployed. A lack of clear cut standards is one vexing issue.

Making the Right Connection

Connectivity is a major IoT element but what type of network connection these systems use is unclear. “The IoT is building on top of a number of industry specific networks that are already installed,” says Gartner’s Velosa. For instance, wired communications rule the building automation system market, which collects usage information from commercial building systems, like HVAC units. Advances in wireless networking technology have made it a viable option in other market segments, and variations on cellular networks, Wi-Fi, Bluetooth, and NFC are being developed to connect IoT devices.

For each market, new sensors must be designed, which requires a couple of advances. Components, such as smaller microprocessor chips, need to be developed and their price points lowered. “Currently, we are seeing low end microprocessors selling for a few cents and 32-bit systems priced at about thirty-five cents,” said Gartner’s Velosa.

Sensor software is needed. These systems require operating systems and connectivity tools, so performance information can be collected. In addition, infrastructure, such as techniques to store information in a database management system (DBMS), must be developed. The final software element is applications that identify what information will be collected and how to analyze it.

Expect a Data Breach

In addition, security is a major challenge. Applications need to work with trusted data, and trusted data only comes from secured devices and systems. Currently, skeptics abound. The IDC predicts that 90 percent of IT networks will have an IoT-based security breach within two years. High-profile breaches could slow adoption.

Another challenge is these applications are expected to generate a ginormous volume of data. ABI Research estimates that the data captured by IoT-connected devices in 2014 exceeded 200 exabytes (a billion gigabytes), and that number will grow seven-fold by the decade’s end, surpassing 1,600 exabytes—or 1.6 zettabytes—in 2020. The data collection means massive increases in storage and computing power as well as tools to manage these systems.

Businesses will need to make significant upfront investments in IoT solutions. The ROI cases will need to be developed. Not all initiatives will bear fruit, so businesses will go down a few dead ends before reaching their desired destinations.

New Support Challenges

In sum, the IoT has tremendous potential. Interest is high and advances are being made, but implementing new technology is never easy. The challenges that support organizations will face are two-fold. First is the sheer volume of devices: Think about trying to support 25 billion networked devices (a six-fold increase!) in coming years.

Second is the type of support needed. The things of the IoT will not look like computers or even mobile devices. Rather than humans (employees, partners, customers), innate things will be the “intelligence” on both ends of the connection. “Companies will need to develop new support models for these things,” says Turner. New support center tools and procedures are another element in need of further development.

The challenges support organizations will face are two-fold: the sheer volume of devices and the type of support those devices will need.

The IoT is coming—no doubt. Its potential benefits are so great that corporations in a wide variety of markets are moving toward implementation. However, its fledgling status as well as its differences compared to traditional systems mean that the number of calls to the support desk will increase and their nature will change. Bumps are anticipated in the near term, but in the long term, new procedures and processes will be needed to enable support desk personnel to respond to the IoT deluge.

Paul Korzeniowski is a freelance writer specializing in IT support issues. He's been covering technology for a few decades, is based in Sudbury, MA, and can be reached at paulkorzen@aol.com.  

Tag(s): internet of things, support center, service desk, technology, supportworld


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