IoT: Is your business smart and connected?

2015 has started with a bang and the Internet of Things (IoT) continues to consume headlines. At the same time the breadth of its impact is not readily understood leaving many organizations confused as to what exactly IoT is and how they should prepare.

One thing is for sure, it’s all moving very rapidly requiring businesses to move fast. Gartner predicts that 4.9 billion connected things will be in use in 2015, up 30 percent from 2014, and will reach 25 billion by 2020. According to a recent Internet of Things study, over half of the executives (62%) said that they have already adopted IoT based systems or have plans to do so.

So what is IoT really? In simple terms, it’s the next logical evolution of the Internet. But what it represents is much more transformational and may change the face of technology forever.

Apart from the regular consumer and industrial applications embedded with intelligent software, new devices, applications and platforms will come in to existence that will radically change sensing, computing, and communications. For businesses, it is a tremendous opportunity to look for new markets, services and revenue streams.

How did we get here?
The idea that devices and machines are connected to the Internet and communicating, monitoring and exchanging data is undoubtedly some pretty cool stuff.

But the idea of network connected devices is not a new concept and was pioneered as early as 1982 when Carnegie Mellon modified a Coke vending machine to report it’s inventory and drink temperatures over the network.

So why now? As with most technology trends there comes a tipping point that propels it into the mainstream. There are 3 major factors that have enabled IoT to become a reality. First, the cost of connectivity has dropped by 40x over the past 10 years. At the same time the cost of processing has dropped by 60x while the cost of sensors has dropped to half. This has created a perfect storm for IoT to flourish.

Other contributing factors include the ubiquitous WiFi connectivity available for free or at very low cost allowing devices and sensors to easily connect to the Internet. The availability of smartphones have allowed them to become the remote control for many of these “smart” devices and ultimately the personal portal for IoT.

How fast is this happening?
Most estimates predict that there will be close to 50 billion connected devices by 2020. The reality is that today, probably less than 5% of the potential devices are actually connected. In 2014, almost 100 devices per second were being connected and by 2020 that number could grow to 250 things getting connecting each second. It’s all happening very fast and if you want to track the progress of the 50 billion goal, Cisco has a “Connections Counter” so you can follow along.

Will it really change “everything”?
The real power of IoT is not just in the ability of devices to connect to the Internet.

Today there are many examples of smart watches, pedometers, cameras, thermostats, electrical controls, cars all with built-in sensors. Pretty soon, many of our everyday appliances will also be connected and be able to self-monitor and communicate.

The hype will die down around the cool new sensors, high tech wearables, we will see the real power of IoT emerge.

The real power lies in the data analytics, cloud integration and mobile command center. This is driving a new wave of product evolution. Previous waves of IT transformation have occurred, first in the 1970’s when the automation of supply chains from order processing to bill payment allowed companies to standardize processes and gain operational efficiencies. The second wave occurred in 1990’s with the rise of the Internet that allowed companies to gain further efficiencies by integrating into global, distributed supply chains. While these first two waves resulted in large productivity and supply chain optimizations, products have largely remained the same.

How do you become smart?
Smart, connected products are expanding the traditional product boundaries and requiring organizations to rethink their entire product development strategy. Smart products require an entirely new technology infrastructure made up of multiple layers such as new device hardware, sophisticated embedded software, continuous connectivity and an extended product Cloud for remote capabilities.

Smart products typically extend their capabilities over four main areas of sophistication: monitoring, control, optimization and autonomy. Basic monitoring provides real-time assessment of the product’s condition, operating environment and usage patterns. Remote control and optimization further enhance monitoring by allowing product functions and algorithms to have real-time customization of a product’s performance, and interaction. The combination of all of these capabilities allows smart products to achieve levels of autonomy that no longer require human intervention.

The emergence of next generation smart products
Smart, connected products are beginning to emerge and will shortly set the new standard for what is expected.

2015 will see the launch of several Smart clothing lines that merge biometric technology and fashion. Ralph Lauren piloted a new Polo Tech compression shirt at last year’s US Open that was able to send heartbeat, respiration, stress levels and other data to smartphones. In the future, smart clothing may become the new baseline expectation that allows you to live a healthier life.

Juniper Research predicts there will be 100 million connected cars on the road by 2016. Tesla recently signed a partnership with AT&T to provide embedded SIM card connectivity for safety diagnostics and other stats on driver habits and usage. A Tesla vehicle in need of repairs can call for corrective repairs autonomously and send notifications and alerts to customer and service technicians.

The micro device market is one of the fastest growing segments of the medical industry and with built in wireless monitoring capabilities it provides a new level of patient monitoring and care. Medical implants to monitor the heart, glucose levels and blood pressure made by companies such as Medtronic, can be inserted without surgery. They operate without the troublesome and inconvenient wires found in older monitors.

Driving efficiencies in your business
The ability for devices and systems to communicate and operate together implies significant infrastructure changes in the way these devices and systems are managed.

For example, Verizon is saving more than 55 million kWh annually across 24 data centers by deploying hundreds of sensors and control points throughout the data center, connected wirelessly. The result is a reduction of 66 million pounds of greenhouse gases per year.

UPS has increased the productivity of their entire network by monitoring their trucks’ and drivers’ every move. While those brown trucks may look the same, they now have hundreds of sensors. Gathering data about the truck, driver and package’s every move allows UPS to optimize their delivery cycles, increase productivity and reduce costs. According to UPS, “Just one minute per driver per day over the course of a year adds up to $14.5 million.” A typical driver used to be able to deliver 90 packages per day and with the optimizations driven through data collection that has increased to 120.

In Cisco study, in the public sector alone, they could see as much as $4.6 trillion in IoT related savings and revenues worldwide over the next decade. The killer apps might simply be realizing $1.9 trillion through improved energy efficiency in buildings, utility tracking, and highway toll management.

What should companies do?
Smart, connected products will absolutely transform your business. It is likely we will soon see built in intelligence and connectivity emerge as a baseline standard for many mainstream products and services.

The big opportunity is not just in the digitalization of the product but in the new connected ecosystems, value chains and business models that these products can now create. There are big opportunity for companies to generate additional revenue from the development of new products and services based on IoT.

There are also opportunities for increasing productivity and driving down costs from the inherit efficiencies that result in having products being able to self-monitor. The Industrial Internet of Things (IIoT) has the opportunity to significantly increase operational efficiencies through automation.

Organizations need to move quickly to seize the opportunity around IoT. Here are some considerations as you embark on your IoT journey:

  • Revamp your product design process. Develop architectures that will accommodate sensor networks, intelligent devices, and cloud product extensions. Expand your skills to accommodate the multiple tiers in a connected architecture such as edge devices and gateways.
  • Expand your industry boundaries. Smart, connected products will expand industry boundaries by creating product systems that link a variety of product systems together to create an integrated system of systems. Linking these can rapidly increase automation and value creation.
  • Prepare for security early. Smart, connected products open up new gateways to corporate systems and partner ecosystems. Identify security tools and architectures early in your design process. Ensure you set up security at all levels –  cloud, connectivity and device.
  • Build industrial analytics capability. A deep capability in analytics and big data processing will be required to turn all of the data from sensors into real time insights. These analytical capabilities can also present an opportunity to be offered as a business service.
  • Don’t forget about end user experience. As the capabilities and complexity of connected products and services increase, it’s critical that the end user have simple, intuitive user interfaces that allow personalization. Take advantage of smart phones and tablets to create rich, full featured control applications.


Part of this article was originally published on CMSWire on February 4, 2015 and is re-posted here by permission. 

Frank Palermo

Executive Vice President - Global Digital Solutions, Virtusa. Frank Palermo brings more than 24 years of experience in technology leadership across a wide variety of technical products and platforms. Frank has a wealth of experience in leading global teams in large scale, transformational application and product development programs. In his current role at Virtusa, Frank heads the Global Technical Solutions Group which contains many of Virtusa’s specialized technical competency areas such as Business Process Management (BPM), Enterprise Content Management (ECM) and Data Warehousing and Business Intelligence (DWBI). The group is responsible for creating an overall go-to-market strategy, developing technical competencies and standards, and delivering IP based Solutions for each of these practice areas. Frank also leads an emerging technology group that is responsible for incubating new solutions in areas such as mobile computing, social solutions and cloud computing. Frank is also responsible for overseeing all of the Partner Channels as well as Analyst Relations for the firm. Prior to joining Virtusa, Frank was Chief Technology Officer (CTO) for Decorwalla, an emerging B2B marketplace in the interior design industry, where he was responsible for the overall technology strategy, creative direction, and site development and deployment. Prior to that, Frank was CTO and VP of Engineering for INSCI Corporation, a supplier of digital document repositories and integrated output management products and services. Prior to INSCI, Frank worked at IBM in the Advanced Workstations Division, and took part in the PowerPC consortium with IBM, Motorola and Apple. He was also involved in the design of the PowerPC family of microprocessors as well as architecting and developing a massive distributed client/server design automation and simulation system involving thousands of high-end clustered servers. Frank received several patents for his work in the area of microprocessor design and distributed client/server computing. Frank holds a BSEE degree from Northeastern University and completed advanced studies at the University of Texas.

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