We are embarking on a new technological journey that will fundamentally change forever the economy, society and the way that we live. The Internet of Things (IoT) is a world where up to 50 billion things (or devices) will be connected to the Internet by 2020; or, the equivalent of 6 devices for every person on the planet.
The clear winners in this revolution will be those companies that, not only embrace the Internet of Things, but use it to transform their businesses. Those winning companies will be the ones that integrate IoT into their operations, products and customer interactions to create new business models and sources of value. In fact, McKinsey estimates that there could be as much as $11 trillion per year by 2025 in new economic value created by adopting IoT.
Businesses are beginning to completely re-design their processes, operations and business models to benefit from this new era. We are already starting to see the emergence of smart cities, connected utilities, connected railways, connected factories, connected cars, and even connected mines, to name but a few. All industries are looking to IoT as a breakthrough technology to help them optimize their business, enter new markets and enhance their relationship with their customers. This is why industry analysts, like IDC, estimate that businesses will spend up to $20 trillion over the next four years to realize the promise of the Internet of Things.
The dawn of the IoT revolution may have begun but it will still be some time before its transformational powers will be fully felt. There are a number of technical, business, regulatory and perception obstacles that must first be overcome. We are still very much in the early days of the IoT revolution with many companies knowing that they need to do something but not sure, what or how. A study by Harvard Business Review and Verizon found that less than ten percent of enterprises had deployed IoT initiatives. And, of that small minority only 56 percent of those had an IoT strategy. What does that say for the 90 percent of companies who have yet to implement IoT initiatives?
Recent Cisco research of enterprise IT and business decision makers revealed that their top 3 challenges with implementing IoT initiatives in their businesses were: 1) security of business data; 2) standardization of IoT infrastructure and compatibility with business systems; and, 3) cost of implementation. The IoT supplier market is currently very fragmented with a multitude of big and small companies providing single pieces of the IoT implementation – devices, application, point solutions, different platforms, etc. Hence, it is currently challenged to meet these demanding customer needs.
We believe that Service Providers are well positioned to unlock the true value of IoT for business and public sector customers. Our recent white paper, “How Service Providers Can Help Businesses to Realize the Promise of the IoT Revolution,” describes how SPs are well suited to deliver on these customer needs and the strategic and operational decisions that they need to make to build a viable IoT business. In particular, we address a number of key questions that service providers need to answer to build and run a successful IoT business:
● What are the key challenges that businesses have with IoT and how are SPs best positioned to help them?
● How can SPs add further value to their connectivity offerings?
● What are the best opportunities more value and move up the IoT delivery stack from connectivity?
● What are the potential economics and business models of these new solutions and services and how can SPs best extract value?
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