Tapping the connected world of everything3 min read . Updated: 18 Mar 2016, 01:39 AM IST
Popular estimates put the number of connected devices today at 15 billion, which is rising exponentially and set to touch 50 billion four years from now
Imagine a world in which most of us won’t learn to drive. Or we’ll project our thoughts onto screens. Or we’ll forget the word cloud as it becomes the norm. Or life-saving wearables will be commonplace.
Sounds like a Connected World? It sure is.
The Internet of Things, or IoT, connects cars, homes, wearables and everyday objects so that service providers get insight into customer usage and preferences, and improve the customer experience over time. It’s like they are standing right next to you, the user, looking over your shoulder, and getting insights into what you do with the product you buy.
IoT has captured the imagination of all and sundry, and yet with all the noise and commerce already around it, a McKinsey and Co. CXO survey shows that 47% of the addressable market opportunity in IoT is still about five years away.
To tap such a lucrative future, chipmakers such as Qualcomm Inc. and Intel Corp. are expanding into this space, which is somewhat a natural extension of their existing business. Likewise, smartphone makers like Apple Inc. and Samsung Electronics Co. too are veering rapidly towards wearables, smart home markets and the like. Connectivity has whetted the appetite of networking giants and made them equally bullish about these opportunities.
Popular estimates put the number of connected devices today at 15 billion, which is rising exponentially and set to touch 50 billion four years from now. Contrast this with the human population today at about 7.2 billion.
Another remarkable statistic: In 2014, the global spending on IoT was $656 billion. In 2020? A mind-numbing $1.7 trillion, according to International Data Corp.’s research. While the fight to recognize the next big opportunity first is on, there are six key areas which will account for this kind of incredible growth: energy, industrials, cities and communities, safety and security, the consumer sector, and agriculture.
Critical to the progress would be the interoperability between IoT systems. Today, only about 1% of IoT data is being put to some use. That too is mostly restricted to detection and control test cases. But once the surge sets in, there will be a radical shift towards optimization and prediction. Predictions by experts are replete with opportunities in the consumer sector—wearables, driverless cars, sensors to track humans and cargo for safety and other such applications.
The noise of excitement is rising higher in the B2B (business to business) segment, which will ultimately command the lion’s share. The Indian government’s “Make in India" vision puts a special emphasis on manufacturing, and there is an overriding need to set much higher standards for ourselves, given our status as a developing economy. Though a majority of Indian manufacturers are still adopting digitization, a few are delving deep and using IoT in channels and processes to pave the way for others to follow suit.
Mahindra and Mahindra Ltd’s Reva e20 electric car, for instance, uses Vodafone Group Plc’s machine-to-machine platform, and is one of the first Indian cars that connects to smart devices. Tech Mahindra Ltd recently joined AT&T Inc. to help launch the connected scooter—with monitoring facilities for the electric vehicle from Mahindra GenZe.
Service providers with the edge of experience and expertise will score in providing a smooth transition to today’s enterprises. Given what is needed for IoT adoption, for most enterprises, it would have to be a complete overhaul of systems, processes and mindsets.
There will also have to be enough examples of proven success to warrant this change and build the case for return on investment. A challenge that most face today has to do with silos. People and processes function in their respective cohorts and don’t “talk" to one another. Isolation distorts perspective. Adopting IoT would require an upfront capital investment which may be perceived as risky, but once silos break down and there’s flow of knowledge between cross-functional teams, the value-add will be evident. A far cry from standardized legacy systems. India will naturally have to ride that curve and bite the bullet sometime soon.
The volume, velocity and variety of real-time data that’s being generated will need to be acted upon with equal speed to harness its true potential. An ecosystem which supports Big Data and analytics will form the bedrock of success across providers in the realm of data, data infrastructure, data integration and warehousing, analytics software, data presentation software, analytics services, and system integrators and implementers.
After all, a $1.7 trillion market is too big an opportunity to let go.
The author is MD and CEO of Tech Mahindra Ltd and vice-chairman of software body Nasscom