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Case Studies (132)

Interview: 3M's Road to IoT

When you think of 3M you immediately think of Post-It Notes or Scotch tape. If you're old school or local, maybe you know that 3M was founded as Minnesota Mining and Manufacturing Company. But have you ever thought about this company, which has $30 billion in annual sales, employs 88,000 people worldwide and produces more than 55,000 products, as an IoT company? All that material science must have an opportunity in IoT. 

For that we turned to Dr. Jennifer F. Schumacher, the technical supervisor and co-founder of the Computational Intelligence group in the Corporate Research Laboratory at 3M Company. She manages a team and portfolio of 35 new technology Introduction programs which are mechanizing, electrifying, and digitizing 3M materials. Her current initiative is to drive technology platform development in computer vision, machine learning, and deep learning

When people talk about 3M, the first thing that usually comes to mind is Post-it® Notes, and they might not think about 3M at the ready for future advances. How is a materials science company playing in the IoT space?

They say you’re never more than ten feet from a 3M product – that is a lot of potential “things” we could integrate into the IoT space. In fact, we have already digitized the simple Post-it® Notes through the Post-it® Plus App, it integrates physical and digital notes and lets you connect with others to share, for example, outputs from brainstorming sessions.  

What have been some of the roadblocks you and your team have faced in convincing people that a materials science company is also a tech and data science company? How are you working to overcome this?

The data science/machine learning group at 3M is relatively new, and as such, many of the technologies we are developing are not ready for public disclosure yet. Therefore, it is difficult to communicate externally that 3M is actually working on these things, and difficult to recruit talent in this high-demand skillset space. We are addressing this by attending key conferences and interacting more with universities, for example we are sponsoring a seminar series at the University of Wisconsin – Madison.

You have a PhD in neuroscience and an expertise in human vision. How does this apply to your work at 3M when it comes to data science and the IoT?

I initially leveraged my expertise in human vision to develop the 3M™ Display Quality Score – a metric that predicts how well a human will prefer a digital display based on its resolution, contrast, color saturation, etc. I then translated this skillset from understanding how people see, to teaching computers how to see, or ‘computer vision’. The opportunity to learn new things and adapt skillsets makes the job fun.

I believe that in a world full of data, it will be the ones that ask the right questions that have the advantage. Formal training in science has helped me hone my skills in asking the right questions so the most efficient and effective experiments can be carried out first. Much of my formal training has been multi-disciplinary, and I think this breadth of knowledge and cross pollination of ideas and concepts is the key to innovation. 3M’s approach to science is aligned to this approach of cross pollinating ideas and heavy collaboration.

Explain how machine learning can be applied to 3M products?

Machine learning thrives on data. 3M products are, or could be, producing data. We can then leverage the insights from the algorithms to enhance the product itself (for example, the Victory Series™ buccal tubes, which were optimized for fit) or to create an entirely new solution (we have several in the pipeline, so stay tuned!)

What can 3M do to adapt to the current digital economy and help your customers adapt?

There is a global trend of greater economic opportunity in service-based business models rather than product-based. I think 3M will need to start adapting some of these service-based models to adapt to the current digital economy, and we can do so by providing complete solutions (products + services) to our customers.

What do you think the most pressing challenges are when it comes to IoT? How is 3M working to solve these?

The most pressing challenge I see is finding the most impactful applications – there are plenty of ‘cool’ factor solutions or products, but what are the sustainable solutions, the ones that significantly improve the quality of life or enable new capabilities? 3M’s vision statement concludes with ‘3M Innovation Improving Every Life’, so I think we align our research goals with significant global technology trends and sustainability issues that would have this broad impact.

 What excites you most about the future of IoT?

The more trivial decisions that a smart system can take care of, the more time I can spend dreaming and implementing what the next technology to improve lives will be.

 

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Not all Devices are IoT or IIoT

Introduction

Business opportunities created by Internet of Things (IoT) and the Industrial IoT (IIoT) are among the most
debated topics, as these are designed to function in a broad range of consumer and industrial applications.
Manufacturers of IoT components believe in this new trend, but many of them still not understand the essence
of the IoT concept. In reality, not every controlled device is an IoT nor IIoT.

The IoT/IIoT concept is a communication-based eco-system in which control devices, CCTV cameras and
industrial sensors communicate via the Internet with cloud-based computer systems and data sources, and
the result of this process is displayed on a computer screen, smartphone or used for optimal activation of a
process. Through an IoT/IIoT ecosystem you may boost productivity and achieve unique benefits. Examples
of IoT/IIoT include applications such as; remote operation of home appliances, medical devices, check on
availability of a product in a store, warnings of unusual conditions and malfunctions and more.

Leading market research firms already estimate that by 2020 there will be over 20 billion devices worldwide,
defined as part of IoT/IIoT systems. Although the forecasted number is growing every year, it is not clear
whether these figures correctly refer to what can be and what cannot be considered IoT or IIoT. It is strongly
recommended that decision factors such as outlined below shall be taken into consideration.

Devices not considered as IoT/IIoT

In reality not all devices can be accepted to the “IoT/IIoT Club”. Through the following three examples I will
try to clarify the main considerations referring to this topic.
a) You purchased a home air conditioner activated by a smartphone or a web based application. If the
packing label shows “Wi-Fi-Ready”, you can do that, but it will not necessarily make it an IoT, since remote
activation by itself is not a sufficient condition to call it an IoT.
b) You consider to add a vibration sensor to a large water pump or gas turbine to diagnose a malfunction.
This is not an IIoT, as the vibration sensor device is reporting to a special PLC and an ICS computer
which control the operation of that machinery and may stop it if a fault is detected.
c) You purchased a CCTV camera, which is connected to a home computer or a VCR for security
surveillance. This is also not an IoT, because 24/7 loop recording system does not require additional data
available from cloud based resources and not require cloud based computing.

Devices considered as IoT/IIoT

Here are three commercial, consumer oriented and industrial examples, that according to listed explanations
are considered appropriate for being considered as IoT/IIoT ecosystem.
a) Computerized control of a washing machine. The IoT ecosystem using the built-in controller which
support the decision related to optimal starting of the washing process. Consequently, the IoT controller
device communicates with cloud based data sources related to the following considerations:
• Is there a report from the electric company on unusually high loading of the power grid at the
neighborhood? If yes, the washing process is delayed.
• Is it forbidden to cause unusual noise in a residential area such as may be caused by the washing
machine? If yes, the washing process is delayed
• Is there sufficient amount of hot water from the sun-roof boiler as required for the washing? If not, the
activation is delayed until electric heating of the water is completed.

The operation of a solar power plant can be controlled by an IIoT process. After the power plant receives
a request to start supplying power, the IIoT ecosystem system checks the following conditions:
• Is the forecasted intensity of sun-rays during the next few hours adequate to generate the required
energy to the grid? If not, the power plant activation is canceled.
• Are there alternative electric power resources that are more suitable to generate electricity for the
requested period? If yes, the power plant activation is rejected.
• If there are no other alternatives, the solar power plant will be activated with limiting conditions, and
the power grid operator will be advised accordingly.
c) An order is received to purchase a certain type meat for home use. Following this requirement, the
customer can start and IoT-based search using his smartphone:
• In which food chain is this item available, and what is the ticket price
• Which stores are active during the hours when the purchase is required
• The outcome of that process shall be a list of options sent to the customer
From the three examples listed above you may learn that the IoT/IIoT concept is applicable when it is
impossible to perform a simple interaction between the requesting entity and the device which provides the
service. IoT/IIoT systems allow such interactive process through cloud-based data resources.

Is there a reason for concerns?

Definitely yes, because huge amounts of cheap IoT components without professional configuration and
without cyber security measures will flood the internet network and allow cyber-attacks from all directions and
for any purpose. Can ordinary home owners properly configure these devices, replace the default password
and detect DDoS-type security breach? Of course not, and that's the problem.
Today, as a result of strong expectations towards IoT market, none wants to remember the early 2000’s and
the dot.com bubble. Then, well-known and professional companies invested billions of dollars in products
that did not provide benefits for which users were willing to pay. The benefits came only years later, and then
more resources were required to create new business models in order to recover their losses.

Summary

We all hope for huge IoT/IIoT deployments in the future, as this is good for users, vendors and also for
innovation. But…., anyone considering to develop a new IoT/IIoT ecosystem, shall focus on finding a real
need and properly design a cloud-data based solution that delivers significant benefits.
Cyber protection for any IT and ICS architecture consists of three essential elements that are achievable: a)
the use of security technologies, b) strict adherence to policies, and c) careful user behavior. This is also true
for IoT/IIoT ecosystems. Innovative technologies, components and architectures that will include cyber
protection as part of the IoT/IIoT ecosystem at no extra cost, will definitely drive the success.

Photo credit Martin Košáň via Flickr.

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Antarctica inhabits a unique place in the human exploration mythos. The vast expanse of uninhabitable land twice the size of Australia has birthed legendary stories of human perseverance and cautionary tales about the indomitable force of nature. However, since those early years, Antarctica has become a rich research center for all different kinds of data collection – from climate change, to biology, to seismic and more. And although today there are many organizations with field stations running this data collection, the nature of its, well, nature still presents daily challenges that technology has had a hand in helping address.

Can You Send Data Through Snow?

British Antarctic Survey (BAS) – of recent Boaty McBoatface fame – has been entrenched in this brutal region for over 60 years, the BAS endeavors to gather data on the polar environment and search for indicators of global change. Its studies of sediments, ice cores, meteorites, the polar atmosphere and ever-changing ice shelves are vitally important and help predict the global climate of the future. Indeed, the BAS is one of the most essential research institutions in the world.

In addition to two research ships, five aircraft and five research stations, the BAS relies on state of the art data gathering equipment to complete its mission. From GPS equipment to motion and atmospheric sensors, the BAS deploys only the most precise and reliable equipment available to generate data. Reliable equipment is vital because of the exceedingly high cost of shipping and repair in such a remote place.

To collect this data, BAS required a network that could reliably transmit it in what could be considered one of the harshest environments on the planet. This means deploying GPS equipment, motion and atmospheric sensors, radios and more that could stand up to the daily tests.

In order to collect and transport the data in this harsh environment, BAS needed a ruggedized solution that could handle both the freezing temperatures (-58 degrees F in the winer), strong winds and snow accumulation. Additionally, the solution needed to be low power due to the region’s lack of power infrastructure.

 The Application

Halley VI Research Station is a highly advanced platform for global earth, atmospheric and space weather observation. Built on a floating ice shelf in the Weddell Sea, Halley VI is the world’s first re-locatable research facility. It provides scientists with state-of-the-art laboratories and living accommodation, enabling them to study pressing global problems from climate change and sea-level rise to space weather and the ozone hole (Source: BAS website).

The BAS monitors the movement of Brunt Ice Shelf around Halley VI using highly accurate remote field site GPS installations. It employs FreeWave radios at these locations to transmit data from the field sites back to a collection point on the base.

Once there, the data undergoes postprocessing and is sent back to Cambridge, England for analysis. Below are Google Maps representation of the location of the Halley VI Research Station and a satellite image (from 2011) shows the first 9 of the remote GPS systems in relation to Halley VI.

The Problem

Data transport and collection at Halley VI requires highly ruggedized, yet precise and reliable wireless communication systems to be successful. Antarctica is the highest, driest, windiest and coldest region on earth and environmental condition are extremely harsh year round. Temperatures can drop below -50°C (-58 °F) during the winter months.

Winds are predominantly from the east. Strong winds usually pick up the dusty surface snow, reducing visibility to a few meters. Approximately 1.2 meters of snow accumulates each year on the Brunt Ice Shelf and buildings on the surface become covered and eventually crushed by snow.

This part of the ice shelf is also moving westward by approximately 700 meters per year. There is 24-hour darkness for 105 days per year when Halley VI is completely isolated from the outside world by the surrounding sea ice (Source: BAS Website).

Additionally, the components of the wireless ecosystem need to be low power due to the region’s obvious lack of power infrastructure. These field site systems have been designed from ‘off the shelf’ available parts that have been integrated and ‘winterized’ by BAS for Antarctic deployment.

The Solution

The BAS turned to wireless data radios from FreeWave that ensure uptime and that can transport data over ice – typically a hindrance to RF communications. Currently, the network consists of 19 FreeWave 900 MHz radios, each connected to a remote GPS station containing sensors that track the movement of the Brunt Ice Shelf near the Halley VI Research Station.

The highly advanced GPS sensors accurately determine the Shelf’s position and dynamics, before reporting this back to a base station at Halley VI. Throughput consists of a 200 kilobit file over 12 minutes, and the longest range between a field site and the research station is approximately 30 kilometers.

Deployment of the GPS field site is done by teams of 3-4 staff using a combination of sledges and skidoo, or Twin Otter aircraft, depending on the distance and the abundance of ice features such as crevassing. As such, wireless equipment needed to be lightweight and easy to install and configure because of obvious human and material resource constraints.

In addition, the solution has to revolve around low power consumption. FreeWave radios have more than two decades of military application and many of the technical advancements made in collaboration with its military partners have led to innovations around low power consumption and improved field performance. The below image shows an example of a BAS remote GPS site, powered by a combination of batteries, a solar panel and a wind turbine (penguin not included).

FreeWave Technologies has been a supplier to the BAS for nearly a decade and has provided a reliable wireless IoT network in spite of nearly year-round brutal weather conditions. To learn more, visit: http://www.freewave.com/technology/.

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From wind turbines to your washing machine, the IoT is all the rage, and everyone wants their piece of the pie. Monetization and creating business value, not to mention profits, is the holy grail for the IoT. But who is really making money on the IoT and where are the most lucrative opportunities?  For that we turned to Mike Fallon, Senior Advisor of the IoT Transformation Advisory Practice at PTC. Mike is responsible for delivering frameworks to companies that address the how of IoT monetization – specifically for CIOs and other C-suite executives.

How can organizations profit from the IoT? 

Today, we are seeing two primary areas of opportunity for monetizing the IoT: operational efficiencies and new revenue generation. Operational efficiencies are of interest because of how the IoT allows you to organize and use data. In manufacturing, for example, the IoT can help to prevent unplanned downtime, capture real-time insights regarding production and operation, and integrate data across an extended supply chain.

Of even greater interest, right now, is new revenue generation, particularly for hardware companies that see opportunities to introduce digital services into their product offerings. Since the economy has rebounded from the recession, C-level executives and shareholders are very focused on growth. With so many digital transformations happening right now, traditional manufacturers and hardware companies are looking to these digital services as a way to generate new revenue and bring value to those transformations that are underway.

Why is it so hard to monetize the Internet of Things? 

We see a handful of common challenges as we talk to companies about monetizing their IoT strategies. One of the main challenges is developing a strategy and achieving alignment across key stakeholders in the organization. This often carries over to another challenge that we see – companies taking an inside-out approach that prioritizes the provider’s goals over what the end customer needs. Many companies aren’t asking themselves important questions about their strategies, such as, “How do we ensure that the customer or user cares enough about our service to want to pay for it?” The most successful companies are the ones that prioritize the user’s needs and the user experience.

Further, this idea of forming the right strategy can extend to the company’s go-to-market execution. This can be particularly challenging for companies that traditionally sell hardware and are trying to introduce digital services to their customers as part of new offerings. Whenever new offerings or services are introduced, the challenge of how to best market them typically follows.


There is no neat one-size-fits-all monetization model for the IoT, not least because the needs of different companies vary hugely. What are some of the successful models that you have seen, both in consumer and industrial sectors of IoT?

If we look at new revenue monetization, the key question that a company needs to answer as it shapes its business model is, “What is my customer or user willing to pay and how would they like to buy?” Many companies get trapped in what we could describe as more traditional thinking, often asking themselves, “How do I want to bill the customer?” along with other internal-oriented perspectives. These factors won’t be ignored, but the best business models are the ones that customers adopt rapidly because it’s clear to the customer how the software or service helps them do their job easier, enables them to do more than they could previously, and helps them achieve their own goals and objectives.

If companies stick to an inside-out approach that prioritizes their own needs over those of the customer, they’re potentially setting themselves up for failure because they likely aren’t doing all that they can to achieve the customer adoption needed to be successful.

As our publication name suggests, we focus on the Internet of Things, specifically the Industrial IoT. How do you plan to roll your product out for IoT devices? Can you provide examples?  

Right now, the IoT space is being defined by the platform. More and more companies are adopting IoT platforms, like the ThingWorx Industrial IoT platform from PTC, for their IoT initiatives. The best platforms provide companies with the capabilities that they need to be successful with their IoT strategies, such as application enablement, machine learning, industrial connectivity, and, increasingly, augmented reality.

Platforms allow companies to rapidly iterate as they build new IoT applications and solutions. This is crucial right now, as the IoT space is still maturing and companies are determining what works and what is needed in the market. Platforms also help companies future-proof their IoT strategies, as the best platforms will continue to add new capabilities and features to match the evolution and maturity of the market.

PTC makes ThingWorx available to partner companies and solution builders, which, in turn, use the platform to develop new solutions and applications that they sell to end customers. These solution builders can be system integrators, hardware companies, or other software companies. PTC has developed a robust ThingWorx partner ecosystem that offers companies multiple ways to take advantage of the platform and its many benefits.

Additionally, PTC uses ThingWorx for its own internal development of new connected solutions that are sold through its well-known solutions business, focused primarily on computer-aided design (CAD) and product lifecycle management (PLM). An example is the Navigate application from PTC – a PLM-focused solution that has emerged as one of the best-selling solutions in PTC history.

Talk to us about pricing models. What are they, which are the most popular and which ones do you see has having the longest and greatest run?   

The IoT Transformation Advisory Practice at PTC spends a lot of time looking at pricing and business models. One of the things that we most often emphasize to our customers is, once the strategy around deciding what to connect and what data you can collect is set, do not try to copy and paste business models. There is rarely a one-size-fits-all approach when it comes to IoT business models, primarily because each customer could have a different set of needs and/or objectives. At a higher level, this is where companies tend to struggle with generating new revenue through IoT. The pricing models that work start with understanding the needs and aspirations of the user of the service. The company needs to understand what the user is willing to pay for and the specifications that are included.

In today’s world, opting in and out of digital services is commonplace – it could be something as simple as cancelling a Spotify account or it could reach the level of an Industrial IoT service. The pricing models with the greatest and most sustained adoption will fit the evolving needs and expectations of the customer. Because the companies providing the new services will likely have insights into their customers’ operations, they’ll have the opportunity to have access to changing behaviors and shifts in their customers’ business.

As we’ve seen our customers’ journeys evolve, we’ve started to see innovation possibilities in the context of outcome-based design as well. Outcome-based design will continue to be important because it helps to align the design and engineering teams and more closely connects them to user insights that drive more targeted innovation and a faster time-to-market, all in the context of the customer experience.

Who in the organization plays the most important role creating an IoT monetization strategy?

It seems that there’s a common misconception that there’s one person who is most crucial to the development of an IoT monetization strategy. To be successful with a monetization strategy, it can’t fall solely on the shoulders of the CIO, CMO, CTO, etc. There needs to be a cross-functional team that provides input from each member’s respective discipline. IT, marketing, and finance can all play important roles in the development of the strategy, and it’s important that there’s a balance between these perspectives. When I work with customers, establishing a cross-functional view is a critical first step that I help them with.

If the CIO or another executive is in the lead role, he or she should reach across the hall and ensure that team members that spend all day thinking about customers and have direct engagement with customers are part of the team. This could be someone as high up as the CMO or it would be a more focused product marketing manager or director. Marketing will need to be a part of the solution to help guide the go-to-market strategy and execution.

So if a company wants to begin monetizing IoT, what’s the go-to-market approach they should take?

I work with companies that, for centuries, have been successful building their businesses with business models largely driven by the sale of physical products. While aftermarket services have also been a source of value (spare parts, component upgrades, warranty services, etc.), the strategy by the naming associated with “after” has been just that.

My background is working with companies that produce physical products. Now that I am in software, I have gained an appreciation for the importance of communicating in advance the availability of new services. This comes back to the critical role that marketing plays. Traditional and forward-thinking marketing efforts, along with the use of insights that you have from the customer and user are vital to connecting with your market.

As we think about how these new services will be sold, it’s important to consider that most sales executives could be used to getting paid in a certain way for selling a physical product. If the new service that is introduced requires a new selling strategy – perhaps one that requires more support from marketing, inside sales, or aftermarket services – both the learning curve and overall motivation for the sales executive needs to be considered.

If your strategy is to drive rapid adoption of the new service from your customers, at least at the initial launch of the offering, having a team that is dedicated to service with a focused understanding of the offering and a focused incentive or rewards system will typically drive adoption more rapidly and will have access to learnings that you may want to incorporate into the service as you iterate. Remember that your customer’s and user’s needs are in constant evolution and continuing to meet and anticipate those needs is critical to the overall strategy.

Anything else you’d like to add?

To summarize, there are six main components to think about when developing an IoT monetization strategy:

  • Strategy – Understand the objective in terms of a broad adoption strategy versus a more selective, premium offering for selective customers.
  • User-Centric – Approach the strategy from a user-focused perspective and build your design for revenue off of this.
  • What to Charge – Leverage learnings from user-engagement and feedback to understand pricing models.
  • How to Charge – Put a focus on making the service easy to adopt or test out.
  • Go-to-Market – Remember that this is a team game, driven by the cross-functional group that has developed the overall strategy. Tell a user-centric story and consider who sells and how to keep incentive and reward systems from being barriers.
  • Technology – Ideally, the technology that’s offered will have robust capabilities, allow for secure, rapid iteration and scaling, and allow for integration to other business and enterprise systems.
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Internet of Things (IoT) solutions offer tremendous and disruptive value for customers, but sometimes have the unintended effect of adversely impacting the channel that it is sold and serviced through. This results in slow adoption of IoT solutions, even if those solutions have significant and tangible customer value.


Common product-market fit mistakes

While many IoT vendors understand the concept of product-market fit, a common mistake that many product managers make is to overlook or understate the impact of the solution on stakeholders that “touch” the solution (Figure One) beyond the end user customer. When the needs of all the primary and secondary stakeholders are aligned with the solution, market adoption is facilitated. When the needs of these stakeholders conflict, market adoption is slowed or even stopped. 

One example of an external stakeholder is the channel reseller. Many manufacturers incorporate a channel strategy to market, sell and service their products in order to scale the business. The channel can be an one tier channel (manufacturer sells direct to reseller, who then resells it to the end customer) or a two tier channel (manufacturer sells to distributor, who then resells it to reseller, who finally resells it to the end customer). 

Consider an IoT based predictive maintenance solution for commercial heating, ventilation, and air conditioning (HVAC) systems. With this solution, the channel resellers will now know when the parts in the HVAC system are wearing out and a proactive service call is needed. While this assures the customers that their HVAC system will have minimum downtime, it may not be so good for the reseller. Prior to the incorporation of IoT into an HVAC system, channel resellers may have set up a service agreement with the end user where they would perform routine maintenance four times a year. With the IoT solution in place, it may reveal that they only need to come out once or twice a year to do maintenance. The reduced number of visits mean that their revenues from service calls is also reduced. Given this reality, the channel resellers have no incentive to adopt the predictive maintenance solution. 

A second common mistake is to look at product-market fit from a static perspective. In fact, the product manager must look at the product-market fit over the solution’s entire lifecycle from purchase to retirement (Figure Two). At each of the stages over the lifecycle, there may be different people or organizations “touching” the solution and performing a slightly different task in support of common activities. Problems arise when the needs of each party are inconsistent or misaligned.

Conflicts, or friction arise between the buyer, the vendor and the other affected stakeholders when there is misalignment of their needs. These needs may include performance, cost, revenue, operating efficiency, roles and responsibilities. Some of these misalignments may be managed, while others may be more severe and require a solution redesign.


Best practices to remove the friction points


Practice#1 - Expand your product-market fit analysis over the entire solution lifecycle.

As you design your IoT solutions, map out the different stakeholders that touch your product, from the time it leaves your hands delivery to the time it is retired from use. Identify who they are, why the customer buys from them, the tasks they do, the value they add, and how they make their money.

 How does your solution impact the services the channel provides, their value, and their financials?  What is changed and disintermediated?

It is not always possible to avoid disintermediation. But with this understanding, work with the channel to co-create a solution that removes the friction points, creates new value and opportunities.


Practice #2 - Create new value beyond product innovation.

Product managers must think beyond product and technology innovation. IoT solutions can also provide business model, service, and customer experience innovation. When designing the IoT solution with the channel needs in mind, look for opportunities to create these forms of innovation that will provide significant value for all stakeholders.

Customer experience innovation transforms the “customer journey”. It re-imagines how a customer uses a product or service. It uses data collected to create new processes, business partnerships, organizations and technology to support the new journey. Examples include Apple iPod/iTunes changes how we buy and listen to music, Uber changes how we go from one place to another, Netflix changes how we watch television, and Amazon Echo ((“Alexa”) changes how we control devices.

Services innovation transforms how, what and when a service is rendered, and who it is being offered to. It enhances a current value, or creates an entirely new value that was not possible before. A product can also be transformed into a service (e.g. car rentals). Some examples include Software-as-a-Service changes how we buy software, Uber changes how we go from one place to another, and Amazon Web Services changes businesses use IT infrastructure.

Business model innovation. A business model describes how an organization creates and delivers value to its customers. It is defined by nine parts – customer types, value to customer, sales channels, customer relationship types, revenue sources, operating resources, operational activities, key partnerships, and cost structure. Business model innovation transforms these nine parts to create to enhance or create new value to existing customers or to an entirely new customer base. Some example include Amazon Web Services “IT pay for you use” model, ZipCar’s “car sharing” model and Apple iPhone’s app ecosystem model.


Practice #3 - Develop marketing programs that incentivize the channel to pursue “green field” opportunities.

It is not always possible to redesign the solution to eliminate the misalignment between the stakeholders. In this type of scenario, develop marketing and channel programs that allow the channel to target new opportunities where the solution provides a significant competitive advantage. This will allow them to create new revenue streams that will offset any loss of revenues from the current business.

Recalling the predictive maintenance example in which the reseller is reluctant to offer the IoT based solution because their services revenues would decrease. However, the reseller can offer the solution to new customers (those it never had, including those customers who use a competitor’s solutions). The new solution may give them an unique compelling competitive advantage and offset potential revenue decreases when their customers convert to the new IoT solution in the future.


Practice # 4 - Help your channel identify suitable niches within their existing customer base.

While the channel may be reluctant to offer your IoT solution to all of their existing customers, there may be pockets within their base where your solution is in alignment with the reseller’s needs. They may have existing customers where the cost to service them is high, or the revenue impact is minimal, or are considering alternative offerings from other vendors.  Help the channel understand what these opportunities are, identify the target customer profiles, and develop conversion campaigns that allow them to sell to these customer niches.

About:

Benson Chan is an innovation catalyst at Strategy of Things, helping companies transform the Internet of Things into the Innovation of Things through its innovation laboratory, research analyst, consulting and acceleration (execution) services. He has over 25 years of scaling innovative businesses and bringing innovations to market for Fortune 500 and start-up companies. Benson shares his deep experiences in strategy, business development, marketing, product management, engineering and operations management to help IoTCentral readers address strategic and practical IoT issues.

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You’re sold on the Internet of Things (IoT) and its benefits for your organization. But how do you get in the IoT “game”? Where do you start? While there is a lot of information on the technology behind IoT, case studies, and visions of what it can do, there is not a lot of practical content on what you need to get started today. This post discusses five options that managers have for executing pilot IoT projects.
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IoT or Internet of Things solutions, built on a cloud-based infrastructure, create opportunities for new business models and value delivery methods. While many IoT solutions are usually sold as a “product”, many vendors are now beginning to offer IoT “as-a-service”. But selling a recurring revenue solution is not the same as selling an “one time” sale product. This post highlights seven best practices for selling an IoT as a service solution.
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IoT Developer Trends 2017 Edition

Guest post by Ian Skerrett

For the last 3 years we have been tracking the trends of the IoT developer community through the IoT Developer Survey [2015] [2016]. Today, we released the third edition of the IoT Developer Survey 2017. As in previous years, the report provides some interesting insights into what IoT developers are thinking and using to build IoT solutions. Below are some of the key trends we identified in the results.

The survey is the results of a collaboration between the Eclipse IoT Working GroupIEEEAgile-IoT EU and the IoT Council. Each partner promoted the survey to their respective communities. A total of 713 individuals participated in the survey. The complete report is available for everyone and we also make available the detailed data [xlsodf].

As with any survey of this type, I always caution people to see these results as one data point that should be compared to other industry reports. All of these surveys have inherent biases so identifying trends that span surveys is important.

Key Trends from 2017 Survey

 1. Expanding Industry Adoption of IoT

The 2017 survey participants appear to be involved in a more diverse set of industries. IoT Platform and Home Automation industries continue to lead but industries such as Industrial Automation, Smart Cities, Energy Management experience significant growth between 2016 to 2017.

industries

2. Security is the key concern but….

Security continues to be the main concern IoT developers with 46.7% respondents indicating it was a concern. Interoperability (24.4%) and Connectivity (21.4%) are the next most popular concerns mentioned. It would appear that Interoperability is on a downward trend for 2015 (30.7%) and 2016 (29.4%) potentially indicating the work on standards and IoT middleware are lessening this concern.

concerns2017

This year we asked what security-related technologies were being used for IoT solutions. The top two security technologies selected were the existing software technologies, ie. Communication Security (TLS, DTLS) (48.3%) and Data Encryption (43.2%). Hardware oriented security solutions were less popular, ex. Trusted Platform Modules (10%) and Hardware Security Modules (10.6%). Even Over the Air Update was only being used by 18.5% of the respondents. Security may be a key concern but it certainly seems like the adoption of security technology is lagging.

security

3. Top IoT Programming Language Depends…

Java and C are the primary IoT programming languages, along with significant usage of C++, Python and JavaScript. New this year we asked in the survey, language usage by IoT categories: Constrained Devices, IoT Gateway and IoT Cloud Platform. Broken down by these categories it is apparent that language usage depends on the target destination for the developed software:

  • On constrained devices, C (56.4%) and C++ (38.3%) and the dominant languages being used. Java (21.2%) and Python (20.8%) have some usage but JavaScript (10.3%) is minimal.
  • On IoT Gateways, the language of choice is more diverse, Java (40.8%), C (30.4%), Python (29.9%) and C++ (28.1%) are all being used. JavaScript and Node.js have some use.
  • On IoT Cloud Platforms, Java (46.3%) emerges as the dominant language. JavaScript (33.6%), Node.js (26.3%) and Python (26.2%) have some usage. Not surprisingly, C (7.3%) and C++ (11.6%) usage drops off significantly.

Overall, it is clear IoT solution development requires a diverse set of language programming skills. The specific language of choice really depends on the target destination.

4. Linux is key OS; Raspbian and Ubuntu top IoT Linux distros

Linux continues to be the main operating system for IoT. This year we asked to identify OS by the categories: Constrained Device and IoT Gateway. On Constrained Devices, Linux (44.1%) is the most popular OS but the second most popular is No OS/ Bar Metal (27.6%). On IoT Gateway, Linux (66.9%) becomes even more popular and Windows (20.5%) becomes the second choice.

The survey also asked which Linux distro is being used. Raspbian (45.5%) and Ubuntu (44.%) are the two top distros for IoT.

linuxdistros

If Linux is the dominant operating system for IoT, how are the alternative IoT operating systems doing? In 2017, Windows definitely experienced a big jump from previous years. It also seems like FreeRTOS and Contiki are experiencing growth in their usage.

 5. Amazon, MS and Google Top IoT Cloud Platforms

Amazon (42.7%) continues to be the leading IoT Cloud Platform followed by MS Azure (26.7%) and Google Cloud Platform (20.4%). A significant change this year has been the drop of Private / On-premise cloud usage, from 34.9% in 2016 to 18.4% in 2017. This might be an indication that IoT Cloud Platforms are now more mature and developers are ready to embrace them.

cloud

6. Bluetooth, LPWAN protocols and 6LowPAN trending up; Thread sees little adoption

For the last 3 years we have asked what connectivity protocols developers use for IoT solutions. The main response has been TCP/IP and Wi-Fi. However, there are a number of connectivity standards and technologies that are being developed for IoT so it has been interesting to track their adoption within the IoT developer community. Based on the 2017 data, it would appear Bluetooth/Bluetooth Smart (48.2%), LPWAN technologies (ex LoRa, Sigfox, LTE-M) (22.4%) and 6LoWPAN (21.4%) are being adopted by the IoT developer community. However, it would appear Thread (6.4%) is still having limited success with developer adoption.

connectivity2017

Summary

Overall, the survey results are showing some common patterns for IoT developers. The report also looks at common IoT hardware architecture, IDE usage, perceptions of IoT Consortiums, adoption of IoT standards, open source participation in IoT and lots more. I hope the report provides useful information source to the wider IoT industry.

Next week we will be doing a webinar to go through the details of the results. Please join us on April 26 at 10:30amET/16:30pmCET.

2017 IoT Survey - webinar 2

Thank you to everyone who participated in the survey, the individual input is what makes these surveys useful. Also, thank you to our co-sponsors Eclipse IoT Working GroupIEEEAgile IoT and the IoT Council. It is great to be able to collaborate with other successful IoT communities.

We will plan to do another survey next year. Feel free to leave any comments or thoughts on how we can improve it.

This post originally appeared here.

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Guest Contribution by Kenie Ho and Forrest Jones, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP

Everyone at this point, even the most technology averse, has heard of the Internet of Things (IoT) or seen some of its products.  From “learning thermostats” like Nest to “wearable technologies” like the FitBit, the average consumer sees devices moving toward more integration in unexpected places.  And, like the proverbial iceberg, these consumer-facing technologies make up only the tip of a much larger wave of innovation, which is already reshaping how business, the economy, and society operates.  That rising wave is greatest in the Industrial IoT.  

The Tip

At its core, IoT is a simple concept.  It’s about inter-networking not just traditional computing devices, such as personal computers, laptops, or media centers, but also a host of other objects, such as thermostats, coffee makers, cars, lights, security systems, employee badges, watches, and toothbrushes—to name just a few that have been folded into the IoT world. 

The advantage of having each of these devices talking to each other is the same as it was for inter-networking computers: efficiency, communication, and automation.  Say you live in an IoT-connected house and wake up on a cold, snowy morning.  Your smartwatch detects when you wake up through your movement and heartbeat.  It sends a signal for the coffee maker to start and for the thermostat to warm up the house.  Once you’ve enjoyed your coffee, your smart car uses that as a cue to turn on its engine so that you can hop in an already-warmed car and ride to work. 

Before you leave though, the washing machine and dishwasher set themselves to do a load of laundry and dishes. The appliances and water heater talk to each other taking turns cleaning throughout the day, but with maximum efficiency because they know you won’t be home until dark.  With each of these devices connected together, they get the benefit of the information all the other devices collect, and so can do more with minimal additional expense.

The Industrial IoT

The Industrial IoT (IIoT) applies the same concept as the above consumer-facing example, only on a much larger scale and for more specific purposes.  Instead of a coffee maker in your home, the same concept is applied to a fleet of coffee makers in office buildings across a whole city.  Each one reports back to a central server on its inventory, allowing a beverage-supply company to efficiently plan its resupply route.  Or as another example, the component parts in a fleet of construction vehicles each regularly report on their respective wear and tear, allowing the manufacturer to automatically bill and send out replacement parts just before they are needed, saving construction firms time and money in downtime from worn-out equipment. 

IIoT systems tend to focus more on industry needs, with a specific efficiency in mind.  So we see a wide variety of specific, and often purpose-tailored IIoT systems in particular industries.  Compare this with the commercial IoT you see at home.  Home consumers seek integration across a large swath of household objects.  Without knowing precisely what functions they might like over the life of their IoT devices, consumers want to be able to enable whatever future feature they desire without needing to rebuy an entire system.

As IoT technology matures, disparate IIoT systems are merging towards each other similar to the consumer IoT world, leading to many potential conflicts.  For example, GE Predix and IBM Bluemix are already in a collision course as each expands into the analytics space of the IIoT, and the permeating presence of the lighting industry seems destined to spark a wave of litigations as each player vies to upgrade the existing lighting solutions to IIoT-compatible LED systems.

Standards-Essential Patents

In the past, industries have recognized the problems that multiple competing systems can cause.  This has been particularly acute in areas like telecommunications, where multiple devices made by different manufacturers must talk to one another.  Telecommunication companies have typically relied on a standard-setting organization (SSO) to set interoperability standards to ensure compatibility.  Standards will be just as important to IIoT because interoperability is its lifeblood.

Companies who help set a standard often have invested great time and money developing the technology on which the standard may rely, including securing intellectual property (IP) rights like patents to protect that investment.  To address this issue, SSOs typically require that SSO members license any patents essential to practice the standard on “fair, reasonable, and non-discriminatory” terms (referred to as “FRAND” terms).

Sophisticated companies in each industry sector are keeping an eye on IIoT standard-setting efforts.  While it may be frustrating to be limited to FRAND terms when licensing a patent to a competitor, having competitors adopt your technology and pay you a royalty will promote your profile in the industry.  Further, if you don’t participate in the standard-setting process, a competitor’s technology could end up as the adopted standard, and you’d be the one paying license royalties instead of collecting them.

Large-Scale Litigation May Be Inevitable

While some industries may try to rely on technological standards and FRAND licensing terms to ensure ease of entry into the market, it’s likely that other industries will rely on ecosystem “buy-in” to provide customer loyalty.  Ecosystem buy-in is a species of “prospective cost” logic.

If a company has already outfitted its shipping fleet with trucks that use GPS locaters from System Y, then it makes more sense to buy the fuel monitors or load-reporting systems of System Y as well.  Consequently, multiple “System Y" compatible devices will be used across the fleet, making it inefficient to switch to another system.  At that point, the company has bought into the System Y ecosystem of products and won’t want to pay “prospective costs” to switch.

These ecosystem efficiencies will, over time, create a handful of large, powerful default standards, which will perform analogous functions but will have separate competing families of products.  If this sounds familiar, then it should.  This same storm of factors was partially the reason for the explosion in litigation between tech giants, Apple and Samsung, in the on-going smart-phone wars.  In a way, that was the first wave of large-scale IoT patent wars.

An important distinction for firms entering this expanding field, though, is that the smart-phone wars were constrained to mostly just phones.  The technological players were well defined, and each knew who the others were likely to be.  The wars were as much about carving out territory in the market as about placing entry barriers to new, disruptive firms that might challenge existing players.

IIoT seems destined to be much harder to control.  By its nature, it is set up to encourage disruption, as tech companies move into industrial areas they have never touched before, and industrial companies start developing technologies that widely apply beyond their industry.  Amazon’s constantly morphing role in the American tech space, from online goods purveyor to Amazon Web Services provider, is just one example of the power of the IoT.  As these industries are disrupted, it becomes harder, if not impossible, to predict precisely where the next major legal challenge will come.  Therefore, companies have fallen back to the conventional patent practice of developing or acquiring defensive patent portfolios as an essential part of expanding into IIoT.

Conclusion

IIoT is already changing the way industry operates, and this new frontier has pushed its way into the world of intellectual property law.  For pioneers in any field, monitoring and participating in any standards-setting efforts in their industry area becomes critical.  Further, maintaining a comprehensive IP portfolio will be vital to protecting against the waves of litigation to come.  Even with these legal hurdles, though, the IIoT is an area of massive opportunity and growth.

 

Authors’ Bio

Kenie Ho leads the IoT legal group at Finnegan, Henderson, Farabow, Garrett & Dunner LLP. He is a thought leader on IP issues for IoT and frequently speaks and publishes on IoT legal topics.  He has litigated well over 60 patents, primarily focusing on electrical, software, and consumer electronics technology.  In addition to enforcing and defending against patent infringement lawsuits, he helps startups and large companies strategically develop their patent portfolios and IP rights.

Forrest Jones is an attorney at Finnegan, focusing his practice on patent litigation in federal district courts and prosecution ofpatent applications. He has technical experience in electrical and computer engineering, including computer software, signal processing, power generation, consumer electronics, and business methods.

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Are You Real? Bringing Authentication to IoT

Serial entrepreneur Chris Ciabarra is at it again. The co-founder and CTO of Revel Systems, an iPad point-of-sale (POS) disruptor which has a valuation of more than $500 million and landed a global contract to replace all of Shell Oil’s PoS terminals with Revel’s, has helped launch Authenticated Reality, an authenticated secure community that fosters real interactions, comments and online conversations from real people on the internet.

Chris is an anti-hacker and data security expert with a strong background in PCI compliance and P2PE. He has presented across the globe as well as in front of the 5th Annual United States Homeland Security Conference on various security topics including how the Internet needs to change.

While his current company is aimed at getting consumers and business to identify themselves as “real,” we couldn’t help but ask him about what his current endeavor might mean for IoT.

What is Authenticated Reality?

Authenticated Reality is a secure community of users and devices. In order to be accepted into the secure community you must authenticate yourself. With all users authenticated this will keep the online community safe from hackers that often hide behind anonymity .  

You talk a lot about this concept of “The New Internet”. What do you mean by it?  

The New Internet is a secure community of users that connect and see each other's real identity while interacting. The biggest problem we face on the internet today stems from a lack of identification. This problem is widespread across multiple verticals when you look at what is wrong with the current internet. For example, IMDB.com recently disabled their movie boards where fans would comment and engage with other movie fanatics. Why would IMDB.com disable something so popular that millions of their users were actively engaging in? Because they felt it was not longer fostering a positive environment for their millions of users. Too much hatred and spamming from online trolls that hide behind a pseudonym and a computer screen. On The New Internet this hatred and spamming would for the most part go away because once you remove the anonymity, users are going to be much more positive if their comments and interactions will reflect on their reputation that is attached to their real name and identity. On The New Internet you can comment on every single page of the old internet but with your reputation on the line, you will be less likely to post something fictitious or negative.

Tell us how your technology works.

Just download the browser and you will get a sidebar to comment and rate every page on old and New Internet. On The New Internet there will be domains that have never before existed on the old Internet and you will be able to comment and rate those pages as well. Users can purchase any domain name they would like even if it is not available on the old Internet.

As our publication name suggests, we focus on the Internet of Things, specifically the Industrial IoT. How do you plan to roll your product out for IoT devices? Can you provide examples?  

On The New Internet every device will be attached to an authenticated user. This is particularly useful for drones and identifying the owner of the device. We will be able to monitor all IoT devices and if it is acting suspicious we can turn it off the network for further investigation.  

We’ve written about Bruce Schneier and his calls for government regulation to address security issues in the IoT. A part of your offering includes a solution for governments. What’s your take on regulation and where do you see Authenticated Reality playing a role?  

We would like to authenticate all users, entities and devices to enable a safe internet experience.

Do you see any authentication solutions in IoT at this time?  And at what point in the future do you think an IoT solution from Authenticated Reality will be available?   

Yes we have patented a IOT security device that we will release in a few months time that will allow IOT devices to get secured. This IOT security device will have a WiFi access point on it that IOT devices attach and register to and the device will keep them secure.

Anything else you’d like to add?

The New Internet is here and if you had the vision back in 80’s to take advantage of the old internet  you would be rich, now is your chance to have the vision and join the new internet early on.  Join at http://thenewinternet.com

Photo of and credit: Chris Ciabarra

 

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IoT Central Digest, April 4, 2017

Here are the latest featured articles from IoT Central members and contributors. In this issue we look at 5 cities that are doing right in smart city development, a fascinating infographic that will get you up to speed on the history of autonomous vehicles, explore who will survive the era of robots, and much more. 

Reminder: All members are free to post on IoT Central. We feature the best content and share across our social networks and other channels. Consider contributing today. Our guidelines are here. If you like what you're ready, considering forwarding this to a friend and encourage them to join our community here.

5 Cities That Are Setting Trends in Smart City Development

Infographic: The Growth of the Autonomous Car Market

The invention of autonomous cars gained widespread public exposure in 1939’s world fair exhibition. Automakers had envisioned the car with an out of box abilities to drive through green valleys and palm trees on its own. Cars with a variety of techniques like radar sensors, video cameras, ultrasonic sensors and processing computers were to be designed to drive on roads.  

Managing the Risk of Dirty Data With a Pull-Based IoT Architecture

IoT Generalist vs IoT Specialist, Who will survive to the era of Robots?

Breaking Down the IDC Top 10 IoT Predictions for 2017

Guest post by Evan Birkhead.

A new IDC FutureScape offers top 10 predictions for the Worldwide IoT in 2017.  The research evaluates 10 emerging trends and ranks them in terms of their likely impact across the enterprise and the time it will take each prediction to go mainstream (meaning the middle of bellcurve of adoption). 

What is cognitive computing and how does it impact your future


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Infographic: Hotel Rooms of the Future

Today’s emerging technologies are likely to have a huge effect on many industries over the coming decades, hotel companies around the world are already taking advantage of some fairly game-changing devices such as robotic technology that will deliver luggage and room service quickly and efficiently to your hotel room.

But as yet, this kind of technology is not commonly seen in hotels, not just because of technological and cost limitations but also because of the period of mindset change required by consumers, people are used to having all of their queries and whims answered by a human, shifting that responsibility to a robot colleague can feel impersonal if not done well.

But some of the technologies that we are likely to see rolled out more universally will be in the actual rooms of the hotels themselves, this more unobtrusive IoT technology includes devices to display useful information quickly, help improve sleep and make sure in room tech and personal devices work in a truly connected, personalised and seamless manner.

To find out more check out this infographic put together by De Vere Hotels.

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"Trends in Smart City Development" is a new report from the National League of Cities featuring case studies about how five cities – Philadelphia, San Francisco, Chicago, Charlotte, N.C., and New Delhi, India – are using different approaches to implement smart city projects.

The report also provides recommendations to help local governments consider and plan smart city projects.

A "smart city" is one that has developed technological infrastructure that enables it to collect, aggregate, and analyze real-time data to improve the lives of its residents. The report suggests that any smart city effort should include explicit policy recommendations regarding smart infrastructure and data, a functioning administrative component, and some form of community engagement.

You can read the full report here. (PDF)

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The capital city of Ohio has proven to be a true innovator among U.S. Smart Cities, and has even been awarded the winner of the Department of Transportation’s Smart City Challenge. Columbus was chosen thanks to the city being a leader in innovative ideas that will transform the city to become greener, more efficient, and easier to live in. This is the first Smart City award in history, and it comes with some significant benefits for Columbus and its residents.

The most important, is a massive $40 million grant from the Department of Transportation. This will be supplemented by up to $10 million from Vulcan Inc., Paul G. Allen’s project and investment company. This $50 million will go towards a number of city initiatives, and is in addition to around $90 million that the city has already raised from private investors and partner companies.

Plans for the Future

The plans that secured Columbus the win are both ambitious, and holistically minded. Rather than just tackling one or a few different areas of the city for modernization, Columbus plans to invest in a number of different areas to benefit private residents, while supporting important sectors of the economy and attracting new investment.

A new rapid transit system will connect consumers to the main retail district of the city, and self-driving electric shuttles will be a major aspect of this system. This will not only provide easy access for consumers, but it will connect residents to jobs in the central districts of Columbus.

Healthcare is another major focus for smart innovations, and the new rapid transit systems will provide residents with easier access to facilities.

In addition to the rapid transit system, Columbus will implement new RFID technologies that will help to streamline toll payments, monitor traffic flow, and plan for future expansion and improvements based on road usage patterns.

A Worthy Winner of this Unprecedented Award

Columbus is the perfect city to be made the inaugural winner of the Smart City Challenge. Their innovations will help boost the economy and improve quality of life in one of America’s largest business and educational centers.

Merry Christmas and Happy New Year to all.

For more info visit our website at IOT Recruiting

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The invention of autonomous cars gained widespread public exposure in 1939’s world fair exhibition. Automakers had envisioned the car with an out of box abilities to drive through green valleys and palm trees on its own. Cars with a variety of techniques like radar sensors, video cameras, ultrasonic sensors and processing computers were to be designed to drive on roads.  

People then were stunned and unable to believe whether this could be a reality. But today as technology is overpowering us, we can sense the future. Upcoming cars will be designed for a hassle-free ride and quick journey. According to Boston Consulting Group (after an in-depth study), global sale of autonomous cars might be more than 12 million till 2035.  

The infographic below by Get off road unveils the key points of autonomous cars. In order to understand brief about the history of autonomous cars, challenges faced by engineers during manufacturing and what the future holds for autonomous car market head on to the infographic.

There is a lot of IoT going into cars, and also a lot of code.

The Growth Of The Autonomous Car Market

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IoT Central Digest, March 22, 2017

IoT Central is currently at IBM's InterConnect Conference in Las Vegas. We will have a wrap up story later this week, but in the meantime we are tweeting about it here and here, and as well as posting here and here. Follow us!

In this issue, Ventana Research Director David Menninger looks at the technical and organizational challenges of IoT, Sandeep Raut continues his series on digital transformation, Fabrice Jadot goes deep with industrial communications, and Bill McCabe has five questions you should ask your IOT candidates before hiring them. Enjoy.

Reminder: All members are free to post on IoT Central. We feature the best content and share across our social networks and other channels. Consider contributing today. Our guidelines are here. If you like what you're ready, considering forwarding this to a friend and encourage them to join our community here.

IoT Challenges Organization and Technological Readiness


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The Internet of Things (IoT) is a technology that extends digital connectivity to devices and sensors in homes, businesses, vehicles and potentially almost anywhere. This advance enables virtually any device to transmit its data, to which analytics can then be applied to facilitate monitoring and a range of operational functions. IoT can deliver value in several ways. It can provide organizations with more complete data about their operations, which helps them improve efficiencies and so reduce costs. It also can deliver a competitive advantage by enabling them to reduce the elapsed time between an event occurring and operational responses, actions taken or decisions made in response to it.

IoT utilizes what Ventana Research calls operational intelligence, a discipline that has evolved from the capture and analysis of data from instrumentation and machine-to-machine interactions of many types. We define operational intelligence as a set of event-centered information and analysis processes operating across an organization that deliver information to enable effective actions and optimal decisions.

The evolution of operational intelligence and its manifestation in IoT is encouraging companies to revisit their priorities and spending for information and other digital technologies. Ventana Research undertook benchmark research on The Internet of Things to determine the attitudes, requirements and future plans of organizations that use IoT and operational intelligence systems and to identify their best practices. We set out to examine both the commonalities and the qualities specific to major industry sectors and across sizes of organizations. We considered how organizations manage IoT, issues they encounter in the process and how their use of it and related technology is evolving.

While the Internet of Things may still be a novelty to many consumers, organizations participating in our research are well aware of its applications and implications. Four out of five (81%) said IoT is important to their future operations. Majorities said the use of IoT is very important to speed the flow of information and improve the responsiveness of individuals within business processes (61%) and to speed the flow of information to customers or consumers (58%).

The most common uses of IoT are associated with customers (as in sensors on products, by 43%), employees (in wearable technology, 35%) and sensors on devices in the supply chain (31%). At this point, however, more organizations are able to capture IT events (such as a network or system security breach, 59%) than business events (such as a customer contact, 45%). As organizations find more business uses, IoT and operational intelligence will become even more mainstream, and the research indicates that this will occur. Within two years, 95 percent of organizations said they expect to be capturing IT events and 92 percent to be capturing business events.

The research also finds that the intentions of organizations to embrace IoT and use operational intelligence often outpace their current capabilities. For example, many can capture data but face challenges in using it. More than two-thirds (68%) said they are satisfied or somewhat satisfied with their organization’s ability to capture and correlate data from events. After that, managing and using it become more complicated. Nearly one-third (31% each) reported difficulties with inadequate data or in managing external data. About half (48%) said they spend the most time reviewing event data for quality and consistency issues, which suggests a lack of standardization across the data sources that are collected.

Furthermore, most organizations are not ready to derive maximum value from IoT. The processes most commonly implemented, each by approximately half of organizations, are performing root-cause analysis, defining measurements and metrics, and monitoring and correlating activities or events. While these processes are necessary, they are only the first step in improving performance. Fewer have advanced to the point of automating processes, which will be necessary to make full use of the coming deluge of IoT data. For example, only about two in five use data from events to trigger automated processes such as predictive maintenance (38%) or automatic assignment of thresholds for alerts (39%).

This research overall finds strong momentum behind the emergence of the Internet of Things, but it also is clear that many organizations have not caught up to the trend. IoT is here, and its impact on business will only increase; almost all companies can benefit from paying attention to it. We encourage you to use this research to help educate and guide your organization through its IoT journey.


Regards,

David Menninger

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