IoE: The challenges ahead

Craig Bachman/TM Forum
26 Nov 2015

Chasing the white whale of the Internet of Everything (IoE) ‘killer app’ is confusing some of the best organizations as the investments add up and expectations grow. IoE is based on mobility, big data and analytics, sensors, people, places, things and well….everything.

This means, in a digital world, the traditional notion of a killer app has been replaced by the drive to create value by connecting the digital bits in many, many different ways. While the notional killer app drove sales in software, hardware, gaming and consumer devices, today’s IoE markets have become roadmaps of challenges.

This is because end users constantly adapt and innovate business models, technology and IoE capabilities to grow a long tail* set of solutions to address the seemingly endless list of challenges.

We all agree IoE is going to be huge, and even if we can’t agree on the numbers, what’s a few billion between friends? Whatever the size at any particular point in time, no single market sector, industry or application is going to account for the majority of it rather, it will comprise an ever-longer tail of applications. And of course various applications’ proportion of the overall IoE will grow and diminish as things progress.

For instance, as homes, factories, neighborhoods or cities get smarter, applications will multiply and become more granular. A simple example is that already some cities are moving from turning the street lights off at midnight to save energy and money, to being able to control individual street lights. Eindhoven in the Netherlands is doing this to light the journey of pedestrians or cyclists as they pass by, improving the safety of individuals, while still saving resources.

Adjust and adapt

This week the big noise is about smart stadiums and wearable/sports apps, next week it could be smart socks. Business models and technology around connected cars could be the latest in in-car entertainment or cars being able to talk to each other, such as to warn of an icy road ahead. Yes, the big, overall category is mobility, but the go-to market solutions and services are dynamic – always changing.

Put another way, there’s no end-game – no end state for IoE, no ultimate set of business or consumer products. Instead the three pillars of IoE – business models, market expectations and technical capabilities – keep changing. We need to understand and accept that this is how it is and how it’s going to be, then adjust our thinking and adapt.

Some companies have grasped this already; for instance, Amazon epitomizes the philosophy of selling less of more*, morphing from a bookstore to create a third-party marketplace. It also offers cloud services, provides devices, makes its own TV content and is developing drone technology to improve its deliveries, to name just some of its ventures – all part of a grand plan to build and strengthen its expanding ecosystem.

It also explains why IBM recently acquired the Weather Company – because the weather affects almost everything, from agriculture to zebras’ migration. The demand for energy, water, commodities and services are strongly impacted by the weather. The Weather Company’s location database is bigger than anybody’s except Google’s. How long a tail can you get?

According to the Wall Street Journal, IBM paid over $2 billion for the acquisition. If you really think about the number of potential applications, this looks like a bargain, given that a lot of them will be worth a lot of dollars, even if they are a drop in the overall IoE market.

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