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This is the largest growth in the history of humans."

—Janusz Bryzek, known as “the father of sensors"

Finally, the sun is rising over many new and exciting technologies—advanced robots, augmented reality/virtual reality, artificial intelligence (AI), 3D printing, Big Data, blockchain and, of course, sensors. The enabler of all of these technologies is the ability to capture data.

The Internet of Things (IoT), as we all know, is a way to capture and make use of data. And it is quite disruptive in its impact on society—be it businesses, consumers or government. The concept is not new, but was constrained by what technology was able to deliver. What has changed to enable these advancements are the effects of scale (cloud, internet and devices), cost (sensors, bandwidth, cloud, processing power) and new innovations (AI, edge computing). Now, IoT products can be built to spec and cost!

To understand how IoT is being deployed by business today, and where the major growth opportunities will be in the future, we spoke with a lot of experts and early adopters. Our analysis uncovered three major findings: one, there is no such thing as “the" IoT; today’s market is heavily driven by specific use-case scenarios. Two, while in the aggregate, companies will spend an incremental $300 billion on IoT between 2015 and 2020 (over and above their normal technology spend), three industries will account for about 50% of that spending—manufacturing, transport and logistics, and utilities. Other industries such as healthcare, retail and insurance will also see big leaps on the IoT front. Three, although all layers in the IoT technology stack are poised to grow through 2020, the layers are not equally attractive. IoT analytics, apps and services will capture about 50% of this incremental investment.

User industries need to know which IoT use cases have the potential to deliver the most value. Determining this requires recognizing that business leaders are using IoT to solve discrete business challenges. They are asking: how can IoT help our company increase customer satisfaction, improve quality, support new business models and reduce costs? We believe that 10 use cases within industrial IoT are poised to mature rapidly and experience widespread adoption through 2020—predictive maintenance, self-optimizing production, automated inventory management, smart meters, track and trace, remote patient monitoring, distributed generation and storage, connected cars, fleet management, and demand response.

In India, there is also a big evolving opportunity in smart cities. Understanding of the ecosystem (including policymakers, local government, technology and communication providers, etc.) and participation in a strong consortium are key success factors. Businesses may need to think through what role they can play in orchestrating these partnerships and how to shift the current narrative focused on infrastructure to outcome-based use-cases (smart lighting, parking, e-governance services, etc.).

As consumers, our cars, homes and work environments are also getting transformed. As an example, the connected home market in India is on the cusp of breakout growth. This market will also expand from top 15-20 cities to 70-plus cities including several tier-II and tier-III cities over the next few years. Innovative use cases in home protection and appliance diagnostics are feasible in addition to traditional use cases of security, infotainment and lighting.

The technology stack in IoT is complicated—it is not about just one piece of the stack; rather, it is about all the hardware, software and connectivity pieces put together. This complexity may raise a set of non-trivial questions: What do we build in-house and where do we use partners? How are we going to handle security? Also, the realization of the benefits of IoT depends on businesses being able to gain the insights hidden in the vast and growing seas of data available. The future realization of IoT’s promise may depend on machine learning to find the patterns, correlations and anomalies that have the potential of enabling improvements in almost every facet of our daily lives.

In summary, the top five things for business leaders to consider are:

Disrupt or be disrupted: Be bold (but realistic) when rethinking business model and build supportive capabilities (technology, talent) to capture value.

Define vision and implementation road map: Balance long-term targets with road maps for most viable use cases; drive change via iteration between long-term and short-term plans.

Embrace geeks and artists: Be aggressive in the race for talent and don’t relegate design.

Create a high-speed, innovative culture: Use agile, iterative processes for rapid project realization.

Play nice: IoT is about ecosystems; look for partners with complementary capabilities, data and skills.

Sumit Sarawgi is partner and director at Boston Consulting Group India. He delivered the keynote on IoT at the CXO round table organized by Mint and SAP India recently in Gurugram.

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