At the moment, IoT still focuses mainly on consumer-oriented products such as smartwatches and self-driving cars. In the long term, however, business-to-business applications, such as in Industry 4.0 or digitized logistics, will offer even greater potential.
In manufacturing, for instance, databased business models are possible, in which the use of plants is billed according to availability. Currently, however, only a fraction of the data that is generated in the production process is used. Similar trends can be seen everywhere and the IoT trend clearly made an impact in the digital marketing industry. Sharing contextual data – location, users, devices, and applications that originate from IoT devices and the personnel who use and manage them – already enhance business insights significantly as it manages to give customers what they really want. At the same time, new technologies allow us to listen to customers better than ever, so that blatant advertising messages will hopefully become a thing of the past. Listening to the customer and then drawing the right conclusions from it appeals to the zeitgeist and is seen by many as the main task of marketing. After all, only those who listen will win the right insights to speak to their customers appropriately and earn credit for it. The technical tools to achieve this are all available, just not fully utilized by most marketing departments, yet.
The Internet of Things (IoT), the intelligent networking of devices and machines over the Internet, can create a global economic value of up to 11 trillion dollars in 2025, claims the McKinsey Global Institute (MGI). According to their report "Unlocking the potential of the Internet of Things, 90% of total value will benefit users - companies that use IoT applications or consumers - for example through cheaper prices or time savings. In addition, the Internet of Things will soften the boundaries between technology companies and traditional companies and enable new data-driven business models.
“Achieving this kind of impact would require certain conditions to be in place”, McKinsey said, “notably overcoming the technical, organizational, and regulatory hurdles.”
What’s for sure is that a dynamic industry is evolving around IoT technology, and as usual, both incumbents and new players have opportunities, especially since digitization blurs the lines between technology companies and other types of businesses.
“Even at this early stage, the IoT is starting to have a real impact by changing how goods are made and distributed, how products are serviced and refined, and how doctors and patients manage health and wellness. But capturing the full potential of IoT applications will require innovation in technologies and business models, as well as investment in new capabilities and talent. With policy actions to encourage interoperability, ensure security, and protect privacy and property rights, the Internet of Things can begin to reach its full potential—especially if leaders truly embrace data-driven decision making”, McKinsey concludes its report.
But let me quote Tan Teck Boon’s description of the IoT dilemma, which he provided during the INTERPOL World 2017 last week, stating: “The global network of Internet-enabled sensors, devices and systems, called the Internet of Things, promises many upsides. But many IoT products are vulnerable to hacking. In the IoT age, it is vital to strike a balance between the risks and rewards. Bear in mind, IoT products collect a vast amount of personal information, which in the hands of sophisticated criminals can be used to make scams more elaborate and convincing. The reality is that IoT is a “double-edged sword. Common sense tells us that we should never share anything online that we do not want others to know about. But with the advent of IoT, the datafication of our most intimate personal information is unavoidable; more importantly, we will not have a choice about it.”
Indeed, as he said, finding the right balance between risks and rewards will be the key to enjoy the upside while keeping the pitfalls to a level that is tolerable.
By Daniela La Marca