The IoT is a global system of IP-connected sensors, actuators, networks, machines and devices, made possible by the development and proliferation of Internet Protocol (IP) addressable devices connected to the Web. It represents a dramatic leap in the Internet’s development, as connections move beyond conventional computers, routers and servers, to devices that power everything from parking meters and home thermostats, to personal wellness monitors.
The opportunity that the IoT presents for organizations across the value chain is immense. Networking vendor Cisco Systems, Inc. predicts that by 2020, there will be nearly 50 billion Internet addressable and aware devices – a $14.4 trillion business opportunity. A recent GE and World Bank study predicts that the opportunity could be as big as $32 trillion, or 46% of the size of global economy today. This, in turn, will drive the next wave of growth across all industry segments including high-tech.
The IoT is of particular interest to high-tech companies, since many are both producers and consumers of IoT products and services. Market leaders will harness the IoT to either increase sales by delivering more personalized and curated offerings, or decrease input costs by optimizing operations, or both.
Figure 1
Here’s how OEMs can leverage the IoT to improve business delivery and boost their bottom line.
Altering Commercial Practices
Device manufacturers such as Apple (e.g., iBeacon) are implementing Bluetooth low-energy (BLE) wireless technology to create a streamlined platform for sharing location-based information and services. When used in a retail environment (such as a supermarket), this has the potential to significantly personalize users’ shopping experiences.
Whenever a user carrying a smartphone walks into a store, apps installed on the consumer’s smartphone “listen” for nearby sensors. When an app “hears” a sensor, it communicates the relevant data (UUID, major, minor) to its server, which then triggers an action. This could be something as simple as a push message (“Welcome to Target! Check out Doritos on aisle 3!”), or it could include targeted advertisements and special offers (as shown in Figure 2).
Figure 2
Other potential applications for wireless transmitters include mobile payments – where digital wallets can be enabled, based on the shopper’s location, and complete the transaction without the need for the shopper to pay with cash or credit cards. Merchants can leverage this technology to drive shopper analytics inside and outside their stores. Smart solutions can also be implemented beyond retail, including airports, concert venues and theme parks.
OEMs: Manufacturer Partnering
Leading high-tech OEMs are increasingly leveraging their suppliers’ expertise in product design to improve quality and reduce costs. These collaborations – formalized through manufacturer partnership programs – are fast becoming hotbeds of innovation. However, these programs suffer from a flaw: Suppliers have no access to real-time product usage information and, by extension, insights into customer preferences and needs.
Other challenges include:
Most product usage data, if recorded, lies unused with the OEM.
Security concerns and classification issues arise when sharing raw, unstructured data with suppliers.
Data is voluminous, and post-processing is extremely complex and time-consuming.
If post-processing takes too long, the data is often rendered meaningless as product lifecycles contract. Researchers from the Eindhoven University of Technology have suggested one possible IoT solution: automating the usage data collection process and standardizing relevant data available to both OEMs and suppliers. This can be done by incorporating an IoT sensor in the product itself. The sensor needs to be complemented with a predefined observation specification to ensure that recorded data is relevant, accurate and formatted appropriately. Once implemented, the preprocessed data can be shared with corresponding suppliers that, in turn, can use it to understand user preferences and incorporate these preferences into the design.
A Consultative Approach
Our IoT approach is to help high-tech companies understand the impact that IP-connected devices can have on their business, choose the right tools and operate these tools efficiently to extract maximum value.
The first step is to create an IoT roadmap that covers short- and long-term horizons. The next step is to explore IoT use cases to determine where sensors will have maximum impact on the business and within key value streams. After determining usage models and exploring IoT architectures, it’s time to invest in the technology and partners that can create a business-technology strategy that delivers value.
The final piece of the puzzle is to define and execute the operating models of the IoT solution. For example, we have worked closely with high-tech companies to rapidly experiment with subscription offerings, identify plans that work and quickly deploy them across different geographies.
This is part four of a four-part series on the impact of IoT in the high-tech industry. Read more about the impact and applications of IoT in the semiconductor, contract manufacturing and product distribution space in the other installments of this series.
For more detail and examples of the IoT’s impact and application in the high-tech industry, read our whitepaper The Internet of Things: Impact and Applications in the High-Tech Industry. Visit Cognizant Digital Works and the IoT section of our website to learn more about how your organization can optimize its use of the IoT.
