Internet of Things 2020: Five key insights

"It has long since ceased to be a question of whether the Internet of Things (IoT) creates value. Companies need to set the course today to take full advantage of IoT opportunities," says Prith Banerjee, Chief Technology Officer at Schneider Electric. The Schneider Electric IoT 2020 Business Report therefore serves as a guide for innovation and implementation of IoT technologies.

Immediate added value of IoT is considered assured

The report is based on a recent global survey of 2,600 decision makers in twelve countries on IoT. "The hype around the Internet of Things is not new. But our survey proves that IoT technologies are creating real value for businesses in all industries and regions now and will continue to do so in the future," Banerjee said.

The five most important findings

1. A new wave of digital transformation: OT and IT are growing together. The IoT will trigger a new wave of digital business transformation: The worlds of operational technology (OT) and information technology (IT) are converging. Employees will be better and better served with mobile and digital solutions: As digitization expands and intensifies throughout the enterprise environment, the IoT, especially the industrial IoT, will become more prominent. This new wave of transformation is enabled by more affordable networked sensors, integrated information flows and control capabilities, faster and nearly ubiquitous communication networks, increased speed in cloud and edge computing, and expanded data analytics capabilities.
2. Previously untapped data offers opportunities for customer service. The IoT will transform previously unused data into insights that will make it possible to take the customer experience to a new level. When companies are asked about the value proposition and key benefits of the IoT, they think primarily of efficiency gains and cost savings. However, the IoT offers much more: access to previously untapped data, coupled with the ability to draw valuable insights from that data - a key feature of the IoT - will revolutionize customer service and open up new opportunities for companies to improve brand and service loyalty and customer satisfaction.
3. Multi-layered security requirements necessitate hybrid computing environments. The IoT promotes an open, interoperable and hybrid computing approach. This favors collaboration between industry and governments in developing global architectural standards for cybersecurity. While cloud-based IoT solutions are becoming more popular, there will be no monopoly of any particular computing architecture. Instead, IoT will proliferate across edge computing and on-premise computing as part of private and public cloud offerings across a variety of systems. Heterogeneous computing environments for IoT will allow users to choose the IoT solution that best meets their mission-critical security needs. At the same time, companies with older technology infrastructure have the opportunity to evolve in a way that is appropriate and feasible for them, and make the transformation incrementally.
4. Innovations make existing infrastructure obsolete. IoT will be the starting point for innovation, new business models, and economic growth for enterprises, the public sector, and emerging economies. IoT is a milestone on the scale of the Industrial Revolution, the invention of the Internet and the Mobile Revolution. Like these, IoT will lead to greater progress, innovation and prosperity. Companies, cities and communities will deliver new IoT-enabled services and develop new business models. Emerging markets will be able to reap the benefits of the IoT immediately, without having to get rid of outdated infrastructure first. Methods that are no longer up to date will simply be leapfrogged. McKinsey projects that 40% of the global market volume in IoT solutions will be generated in emerging markets.
5. Essential role in solving major societal and environmental problems. IoT will help countries and economies address humanity's biggest challenges, including global warming, water scarcity and pollution. Significantly, survey respondents cited improved resource utilization as the biggest overall benefit of IoT to society. Local and national governments will use IoT to work with the private sector to accelerate and optimize current initiatives, such as reducing greenhouse gas emissions in accordance with the landmark COP21 climate change agreement, which commits 195 countries and the EU to limit global warming to below 2 degrees Celsius.

Optimistic forecasts

From the key findings of the global survey that informed the forecasts, 75% of companies have a positive view of IoT opportunities this year. These include the following:

• Improved customer experience: 63% of companies plan to analyze customer behavior using the IoT in 2016. Top five potential business benefits include faster problem resolution, better customer service, and higher customer satisfaction.
• Cost savings through automation: Building and industrial automation hold the greatest annual savings potential (63% and 62%, respectively). According to the survey results, the future of IoT lies in automation technologies: Nearly half (42%) of respondents plan to implement an IoT-enabled building automation solution in the next two years.
• Realizing IoT benefits through mobile apps: Two-thirds of companies (67%) plan to introduce the Internet of Things via mobile applications in 2016. One-third of respondents (32%) even intend to implement IoT in mobile applications as early as the next six months. The main reason cited is potential cost savings of up to 59%.

81% of respondents believe that insights gained from IoT-based data and information will be shared effectively across the organization. 41% of respondents believe that cybersecurity in the IoT environment is a challenging task for their organization.

Source: www.schneider-electric.ch