The Business of IoT
By Walter Knitl
There is certainly no doubt that the Internet of Things (IoT) is most often associated with or sometimes considered synonymous with technology. After all, any talk of IoT invariably brings up sensors, data communication and storage, analytics and AI, wireless networks – technologies. However, as we have seen with past transformations and paradigm shifts, it is the right combinations or interplay between technologies and business considerations and practices that determine individual venture success and enable paradigms to take long-term root. This was true for the printing press, steam power, the transistor and the Internet – and it’s no different for the Internet of Things.
Scoring success with IoT demands attention to many business challenges and considerations, among them
- having a credible business case,
- using effective innovation techniques,
- meeting the privacy legal challenges, and
- leveraging money sources for IoT projects and ventures
First and foremost is the business case for the IoT product, service or solution. A clear understanding and articulation of a problem to be solved, the financials of the chosen solution and the return on invest-ment (ROI) or net benefit derived. Take, for example, an IoT solution for monitoring water table levels over a wide area. For the solution provider, the business case must consider the cost and cost-performance trade-offs of different types of sensors, wide-area wireless technologies and associated network equip-ment, and installation and maintenance costs weighed against the revenue from delivering and operating the solution. For the solution user, ROI compares the cost savings derived from manual monitoring (for example) relative to the investment and operating costs of the IoT based solution. Furthermore, there must be alignment between the IoT provider and IoT user business cases for any IoT business to suc-ceed.
Due to its breadth, IoT offers great flexibility in solution delivery and innovation opportunity for both tech-nology and business models. However, this fact also presents a challenge to derive the right solution for the true problem from a plethora of possibilities, creating a need for more effective intentional innovation. Being open to and adopting techniques such as Design Thinking is critical to the business success of IoT providers and users alike. It calls for empathizing with provider and user needs, values and goals to iden-tify true problems to be solved, followed by solution ideation, prototyping, and testing. Application of De-sign Thinking to IoT business not only delivers novel solutions and business models but is equally im-portant to de-risking their financial returns.
Privacy Legal Challenge
Financials are not the only areas of risk in an IoT business. Considering that cybersecurity and privacy continue to be the top worries among IoT users, understanding the legal implications and risks stemming from privacy concerns is critical for IoT based businesses. It’s important on several fronts including avoiding regulatory breaches, potential exposure to customer backlash and resulting liabilities, and for building privacy into IoT product design from the start. Privacy has already proven to be of critical im-portance to IoT’s younger cousin the Internet and now becomes even more so with the melding of the cyber and the physical worlds. Not heeding the legal challenge can also result in significant financial im-plications, among them attraction (or not) of IoT venture investment in some quarters.
The Internet of Things is a beneficiary of considerable attention from the investment community, stem-ming from the great opportunities for financial return due to the real-world needs it solves. Government programs in the form of grants and tax advantages can also be a source of funds considering that IoT is a digital technology and an innovation driver, both of which have high priority and attention in the current government agenda. Understanding the requirements and parameters around government and private sector money best suited for IoT can be a crucial factor in IoT project or venture realization.
Whether you are an entrepreneur starting a business in IoT or an established company growing in the IoT direction, the above must be among the top considerations for your IoT business success. The Business of IoT workshop at the IoT613 Conference 2018 is the perfect place to get a jump on gaining these skills from experts in the field, to take away and immediately apply.