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Leading research firms and technology providers have estimated that in the next five years, there will be anywhere between 38 billion and 75 billion smart connected devices that make up the Internet of Things (IoT). These will be devices with embedded technology, enabling them to sense and interact with changes in the environment.

According to Gartner Inc. research, it is estimated that IoT will generate $2 trillion in global economic value across industry sectors by 2020. The consumer applications sector will lead the installed base of IoT devices. Manufacturing, automotive, healthcare and insurance will continue to be among the top vertical sectors using smart devices.

Device costs are decreasing by several orders of magnitude, making them affordable and widely available. Amazon, Microsoft, Google, IBM, Cisco and Apple have each developed IoT hardware and software platform products with deep advanced analytics capabilities, with their eyes on the prize of $350 billion in incremental revenue.

To thrive in this Digital Age, enterprises must take advantage of the enormous amounts of data generated by their vast networks of customers, suppliers and production facilities to create new business models and improve their value propositions. Harnessing the power of connected IoT devices in real time enables businesses to obtain valuable and actionable insights from data.

For example, healthcare companies are shifting to a wellness approach by connecting the vast array of consumer wearable devices in use, collecting and analysing data about members’ vital signs, activity and exercise habits. Doctors, nurses and other caregivers receive alerts and updates via mobile devices, and the “next-best-action" is determined based on predefined rules.

This system also provides feedback to patients and members on how they can adopt a healthier lifestyle. The benefits include increased patient engagement, lower cost of care, a reduction in medical claims, fewer emergency-room visits and procedures, leading to increased profitability and improved health.

Similarly, manufacturers are exploring real-time IoT monitoring of wear and tear on engine parts for machinery in factories, as well as vehicles on the road. Big Data platforms receive streaming data from vehicle sensors and on-board computers, gathering data including fault codes, temperature and pressure readings, GPS coordinates and part numbers to plan maintenance operations before a critical failure takes place.

In addition to less downtime, lower maintenance costs and better vehicle safety, manufacturers are analysing the data to detect trends, tendencies and defects. The same data is now also being used by product engineering to improve the design of components, for example—optimizing for performance in colder or hotter geographies.

As a final example, insurers are using IoT sensors embedded in connected cars to gather information about driving habits like the daily distance driven, time of day, vehicle speed and braking frequencies in order to generate driver risk ratings. Insurance companies are reducing business risk with a clear, up-to-the-minute risk assessment, and can slice and dice predictive risk data to segment drivers into different risk categories.

Better drivers receive a discount based on their individual habits, while higher-risk drivers receive feedback about improvements they can make, improving the safety of everyone on the road.

I believe that building solutions on disruptive IoT technologies will provide adopters with significant market advantage, as well as customer mindshare and wallet share. Businesses that are in the process of adapting will need to envision how IoT techologies can simplify the way they provide services to customers and invest in becoming digital.

There are thousands of IoT vendors today, and IoT complexity is being encapsulated to make it simpler to use. By working with solution partners who are well versed in IoT services, with deep domain knowledge, a focus on applied research and development, and intellectual property creation, a visionary enterprise can leverage this disruption to not only succeed in the marketplace, but to make a positive impact in their customers’ lives as well.

The author is CEO and president of Syntel Inc.

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