THINK TANK 1
Monetizing the IoT: How Organizations are Making or Saving Monet with IoT
Dilip Sarangan, Industry Principal, Internet of Things (IoT) Frost & Sullivan
Sukamal Banerjee, Executive Vice President and Head of IoT, HCL Technologies
Jesse DeMesa, Venture Partner, Momenta Partners
Christoph Inauen, Vice President, IoT, GTM, SAP
Makarand Joshi, Director, Product Management, IoT Platform, Schneider Electric
Abhi Rele, Director, IoT Product Marketing, Samsung
Faraz Shafiq, Associate Managing Director, Global IoT Practice, Verizon Enterprise Solutions
Pavan Singh, Vice President & Business Head, IoT Security, Covata
IoT transcends industries and vertical markets with solutions that range from automotive to healthcare to energy. This panel discussion featured industry leaders discussing how they work with organizations from the planning stages to deployment and post-deployment with the goal of helping them save money and monetize their investments in IoT.
- Proven ways that IoT could help your organization save money
- Use cases illustrating how organizations have maximized their potential with IoT
- An assessment of the relevance and importance of IoT
- Key areas where IoT could help your organization save money
- Use cases illustrating how organizations have maximized their potential with IoT
The purpose of the discussion was to help the audience gain a deeper understanding of monetizing on IoT deployments. Most of the panel believed that the easiest current opportunities present themselves in the cost reduction cases. Revenue generation will be the next step. As illustrated in the chart below, a recent Frost & Sullivan global survey of 1,980 IT decision makers across verticals revealed that 34% of companies have already invested in IoT solutions, and 39% plan to invest over the next 2 years. Over one third of the respondents are providing small trials and proof of concept; live services with customers, distributions, and suppliers; and deploying next-generation solutions.
Some industries are further along the IoT curve than others, but almost all are on the path.
Each of the panelists shared case studies to provide success stories around IoT to the audience. Below, please find highlights:
Christoph Inauen, Vice President, IoT, GTM, SAP:
Customer cases are categorized into 3 areas:
1) Save money – Port of Hamburg
- Problem: The increased capacity of the port created huge problems with traffic flow due to the additional number of shipments and vehicles.
- Solution: They deployed sensors along the port and in parking lot areas that needed to be managed. The also installed dashboard units in the trucks to notify them of accidents in real time and then give them instructions on where to park or where to go to avoid congestion.
- Results: In the one year they have been up and running, they have improved conditions and enhanced capacity.
2) Create revenue streams – Trenitalia (The primary rail transport company in
- Problem – They needed to increase efficiency - every car that had battery issues had to be taken out of commission.
- Solution – Sensors can now share the status the battery, allowing trains to stay in the system much more of the time.
- Results - Trenitalia saves 7% of maintenance costs.
3) Change business model – Under Armour was discussed as an example of a company that had reinvented itself. Its vision is connected life. They are embedding sensors into shirts and shoes to monitor health and give each consumer tailored recommendations on their body. Specific diet plans can be provided to each individual based on their personal data and goals. This gives the company new revenue streams.
Faraz Shafiq, Associate Managing Director, Global IoT Practice, Verizon Enterprise Solutions:
“We, as in Verizon, can’t just focus on cellular; with IoT we have to be network agnostic.” The platform can take care of IoT needs for cellular as well as fixed lines with connectivity and security. A key question is “what do you do with the data?”
Shafiq gave an example of a situation where there were hundreds of containers on a ship and fourteen people to monitor the containers. With a small form factor sensor attached to the container, they no longer need monitors on board, but only the mechanics to fix any problems when they are alerted. The devices also provide preventive information so problems can be fixed before they become huge ones. Another benefit of this solution is that any data can be sent to customers on their mobile phones. Customers can always check in on their shipments. This reduced operating expenses and capital expenditures.
Makarand Joshi, Director, Product Management, IoT Platform, Schneider Electric:
Schneider makes Uninterruptable Power Supply (UPS) products for data centers. Often these were returned to Best Buy because buyers failed to read the manual. Now, buyers have the capability to register their UPS purchase on theirs smart phones and Schneider can monitor their usage. This way, Schneider can tell the customer when the battery runs out and it needs to be changed. This prevents buyers from simply throwing the UPS’ out. Also valuable is that when there are a lot of UPS’ low on battery, the utilities can be informed.
Sukamal Banerjee, Executive Vice President and Head of IoT, HCL Technologies:
A medical devices company wanted to track and trace inventory and equipment needs for surgical cases. The ability to manage inventory and ensure all the equipment needed for the surgery, and for potential emergencies, is in the surgery room, is critical to maintain costs, and save lives. Previously, a lot of time was lost, when the right tools were not in the operating room when needed.
The barriers to deploying IoT include security risks, cost of integration, managing data protection and privacy requirements, cost of connectivity and the time it takes to develop the solutions.
This should not deter companies in any industry from taking action today to capture the opportunities that lie ahead with the integration of IoT. Start with implementing solutions utilizing IoT to reduce costs. At the same time, start planning for how to create new revenue streams, or how to change a business model.
The key drivers for investment include the ability to boost customer service and marketing programs, automate manual processes, collect customer usage data, and optimize field or on-site operations.
Ecosystems are going to be critical for IoT to really take off. Below are some key quotes from the panelists:
“If you can connect the ecosystems and work together, it can really make IoT implementations successful.” -- Jesse DeMesa
“What’s different about Samsung’s IoT solution is its end-to-end solution, which includes hardware modules, IoT, cloud, and partner ecosystem. It is integrated (saves 9 to 24 months), interoperable (you don’t have to “do the plumbing”), and easy (everything is API driven).” -- Abhi Rele
“Someone who understands the whole ecosystem is important for the solution.” Verizon has implemented a new strategy where the professional services group, rather than the sales team, is the front door to discussing opportunities that IoT can create. These are multi-year engagements, so creating the right relationships is very important to the success of this solution. -- Faraz Shafiq
- Use the case studies you heard about as a starting point. Consider how these case studies can be applied to our organization.
- Discuss IoT implementation costs with your executives – especially the ones that are no-brainers.
- Plan for ways to utilize IoT to create new revenue streams or new business models.
- Understand that every industry is already looking at IoT opportunities – now is the time to get started on your roadmap.
- Talk to Frost & Sullivan if you have any questions – we can support you in a number of ways throughout your planning, implementation, and monitoring process.
FINAL THOUGHTS FROM THE PANELISTS
“IoT is not something you can buy. You buy solutions such as sensors that alert you when there is a problem or you add predictive features that warn before things happen.” --Christoph Inauen
“The common denominator is information; value of information depreciates with time. Aparking spot won’t wait for you for a half hour. [The] right application and analytics in real time is critical.” -- Faraz Shafiq
“Once you implement IoT, it’s critical to recognize that it has to be run in a very different way than you run IT because it has to be a much smaller percent of the cost for each transaction.” -- Sukamel Banerjee
“Why now? [More] connectivity available, [the] cost of sensors down, cost reduction needs, [and] we can process a lot more data effectively. [We] need to position IoT based on industry trends. Data exchange is a big part that IoT will drive towards when the connectivity issues become resolved.” -- Pavan Singh