It is the Wild West days of the Internet of Things (IoT) as solution vendors stake claims to consumer lifestyle, commercial infrastructure, and industrial operations. This month’s IoT/Industrial Internet Bay Area Meetup featured a lively discussion led by Krishna Uppuluri, IoT solutions marketer at GE Software, on the similarities and differences among consumer, commercial, and industrial IoT segments and the evolution of the IoT landscape.
Whether it’s a health tracker such as the popular Fitbit® fitness bandthat counts your daily steps, or a device that can sense the movement of people in commercial buildings, or an intelligent gas turbine that generates 500 megawatts of electricity, IoT devices use sensors to generate new data. They then send that information to other machines and cloud servers for new analytical insights and beneficial actions.
Software takes the information generated by devices and enables those insights to reach end users in actionable ways, accelerating the broader proliferation. Often the software replaces the device by reducing the cost (applications on smartphones cost less than devices) and increasing the broader customer reach (downloads are easier than shipping). Think of maps applications on smartphones replacing GPS devices.
Additionally, the software engages the end-user via intuitive dashboards to explore tradeoffs for better decisions. Using the device examples above, the Fitbit apps on your smartphone might tell you that you fell short of your 10,000 steps per day goal, so tomorrow when you arrive at work you take the stairs. Or your turbine monitoring and diagnostics dashboard flags inefficient operation that can be quickly corrected to minimize operational costs.
Services establish stickiness
Value-added services are critical to sustaining customer traction and expanding monetization. Long-term contracts and/or continuous updates help retain customers. Monetization is driven by active customer use and perceptions of customer benefits.
IoT progression – What matters?
Early IoT solutions such as GPS systems, music players, and mobile phones were cool devices that jumpstarted the consumer interest. Nest and Fitbit further demonstrated the consumer IoT market as well as its monetization potential. As the IoT’s focus expands to commercial and industrial segments, the customer expectations change.
According to Krishna, some key nuances distinguish what matters in consumer, commercial, and industrial segments.
- Devices matter for consumer IoT – The device matters and establishes the initial monetization. Software proliferates the benefits to broader users and markets. Over time the monetization may shift to software-enabled services. Think of Dropcam.
- Services matter for commercial IoT – The services matter because commercial customers focus on resulting outcomes. Software proliferates the benefits with broader visibility and control. A device is an important enabler if it is easy to install and requires minimal infrastructure changes. Lighting and energy control sensors are good examples.
- Devices and services matter for industrial IoT – The device and services matter because industrial devices are capital-intensive assets and services can enable customer-relevant benefits. Software proliferates the benefits based on the exploration of broader tradeoffs and better decisions. Device accuracy is important, as it is the first mile in the value chain. The operational parameter deviations of gas turbines are a good example. Across the ecosystem, the services engagement is key, as it operationalizes the solution in a meaningful way to manage outcomes.
IoT land grab pivots around control points
A few control points seem to be emerging for the IoT land grab across the consumer, commercial, and industrial segments. For consumer IoT, Apple iOS and Google Android will continue to subsume devices and data. For commercial IoT, vendors such as PTC and Google Android will rely on enabling vertical-specific solutions. For industrial IoT, GE’s Industrial Internet analytics solutions jumpstart with a comprehensive solution stack, while traditional IT vendors compete with pure-play data analytics solutions.
As vendors establish sustained traction across their market segments, disruptive new devices, software apps, and outcome-focused services will continue to reshape the IoT frontier across consumer, commercial, and industrial segments.