[This is part 2 of a two-part post.]

At last summer’s Global IoT Conference at the Santa Clara Convention Center, speakers gave concrete examples of change in manufacturing, urban, social and business contexts being driven by Internet of Things (IoT) technologies. They made the connection between the IoT and benefits such as efficiency, improved user experience, product enhancements and tangible value creation.

timthumb.phpThe data, analytics and resulting intelligence of the IoT can be used to improve city services, increase energy efficiency in a number of use cases, provide critical support in emergencies and reduce crime. That is, improve services and end-user experience. And Anand Oswal, Vice President of Engineering for Core Software at Cisco, highlighted the scary alternative that is driving IoT adoption: “Companies that are unable to innovate WILL be left behind.”

Changes Among Businesses

Andrew Thomas, founder of SkyBell Video Doorbell, described how his company added on-demand video as a feature. It proved so popular that it upped network usage to the point where the company had to change its server infrastructure. That’s an instance of change at a company resulting directly from the implementation of IoT technologies.

Businesses seeking to use the IoT to initiate change face an important structural challenge: legacy objects and devices that are part of traditional operational technology (OT). OT and information technology (IT) are fundamentally distinct, although they are starting to converge over Internet Protocol (IP) technology.

OT systems are typically long-lived and use a variety of specialized protocols. These systems were not designed with connectivity in mind, so as they are brought online, their lacking or limited security results in an increased attack surface for the business as a whole. To scale their IoT operations as they integrate OT and IT systems, companies will need automated operations and network resiliency—not necessarily skills that traditional product manufacturers have in abundance.

Cisco’s Anand Oswal brought up the concept of digital disruption in relation to the IoT. This takes various forms:

  • Social disruption is allowing customers to connect with businesses.
  • Mobile disruption is allowing the workforce to connect from anywhere, anytime.
  • Data disruption is allowing businesses to take data from anywhere and create actions that improve their performance.
  • Cloud disruption is allowing businesses to connect to data sources.

Even so, 99% of existing devices remain unconnected. That’s an enormous amount of potential for change and improvement.

Why Change?

Businesses don’t always know why or when change is needed. But it’s imperative that companies stay focused on their products and on their customers’ user experience. Here are a few reasons for businesses to embrace the change prompted, or made possible, by IoT technologies:

  • They can use real-world data from IoT connected products to validate or disprove their assumptions.
  • They can also use that data to improve user experiences and the products themselves.
  • They can keep pace with market and user needs that get disseminated at the speed of social networks.

John Chambers famously said in a tweet: “In 10 years, 40% of Fortune 500 companies will no longer exist.” Companies that fail to recognize the IoT-fueled dynamics of change risk becoming part of that 40%.

Presumably, the 60% that survive the next decade will be the ones most able to embrace and profit from change, including change related to the IoT. A case in point on this positive side is Amazon, which has changed constantly and has experience an 850% growth in revenue over the past eight years. And in the healthcare industry, a 1% improvement in efficiency could provide $63 billion in savings to that market.

So perhaps the best answer to the question of, Why change? is another question: Wouldn’t you rather that your company be part of the surviving 60%?