Is IoT becoming a make or break issue for enterprise success?

With IoT advancing at faster rates than ever and the popularization of distributed edge cloud computing on its way, is it now essential for businesses to be looking into IoT?

Over the past decade, the Internet of Things (IoT) has increasingly driven a wealth of value for organisations who have had a desire to digitally transform their businesses. IoT benefits are varied and wide-reaching but generally come down to lowered costs, greater data wealth, increased productivity or safety and even additional streams of revenue. The rise of IoT has gone hand in hand with things like cloud computing, big data analytics and AI to produce highly effective digital profiles for organisations from just about every industry, helping to pave the way for the digital transformation and the connected enterprise.

IoT has especially picked up a lot of steam in recent years. IDC has forecast that international spending on IoT will hit $745 billion in 2019, representing an increase of 15.4% over the previous year. The analyst also says that the market will continue to grow at double digits throughout the entire period of 2017 - 2022, with a mind-boggling $1 trillion expected to be spent in 2022.

Meanwhile, Zebra technologies in their Intelligent Enterprise Index recorded a 4% increase in enterprise spending on IoT projects, with organisations shelling out an average of 4.6 million over the course of last year. All this spending is going to make for massive economic gains in the coming decade as well, according to forecasts from the McKinsey Global Institute, which projects IoT to generate $11.1 trillion in economic value per year by 2025.

With such comprehensive numbers, it would be hard to argue against IoT as a considerable value proposition, especially for larger companies. Although with all this adoption, is it safe to say that - across a huge number of industries - organisations who are not actively advancing their IoT programs will simply fall by the wayside in lieu of more digitally advanced competitors?

If data is, in fact, the new oil as many pundits have professed, IoT surely represents an opportunity too good not to squander. Considering that there are roughly 7 billion connected IoT devices (a number expected to swell to 22 billion by 2025), which are responsible for the transmission and processing of petabytes upon petabytes of data for many institutions, developing a comprehensive and strategic approach to IoT is becoming fundamental for many businesses.

Digital transformation not possible without IoT?

In it's sixth ‘Internet of Things Barometer', Vodafone surveyed 1430 ‘IoT decision makers' across multiple industries on the adoption and sophistication of their IoT investments. The survey found that over a third (34%) of businesses now use IoT, with 95% of those adopters reporting measurable benefits and 76% reporting that the technology is mission critical for them. 84% of adopters also report growing confidence in IoT, while 83% are continuing to enlarge the scale of their deployments.

Interestingly, Vodafone's survey also found that attitudes from adopters towards no-adopters were highly critical, with 74% saying that non-adopters will have fallen behind rivals within the next five years. In conjunction, 72% of adopters indicated that digital transformation is impossible without IoT and a majority of organisations who are ‘considering' IoT (55%) also testify to this, even though they haven't deployed IoT themselves. 55% of adopters also state that IoT has completely disrupted their industry, while 44% of considerers agree.

Michele Mackenzie, Principal Analyst at Analysys Mason (a contributing analyst to the Vodafone Barometer) says the disruptive nature of IoT comes about when organisations are willing to be a little more ambitious with their projects.

"The Barometer makes it clear that businesses are increasing their investment into IoT as they gain confidence and begin to develop more advanced solutions,'' she says. ‘'In the short term, users of IoT will continue to access reduced costs and improved efficiency, but increasingly ambitious projects will offer the opportunity to change business models. For example, in cities, heavy users of roads could pay more, encouraging the use of different modes of transport with knock-on benefits to public health and the environment."

Vodafone says the surge in IoT adoption can mainly be put down to the fact that the technology is rapidly becoming more sophisticated and cheaper to implement. For many, IoT implementation comes about as organisations look to replace existing equipment or systems and start to realise the benefits through IoT functionality that is increasingly coming by default. Those organisations with a more cohesive plan are the ones who realise the most benefits -- specifically, those with a plan to make the most out of the data derived from IoT. This includes (but is not limited to) ensuring data is correctly labelled and managed, so that it can be effectively used to train machine learning models.

As with many technologies, the implementation of IoT should also start with determining an important business issue, and rallying IoT resources to address it, enabling business growth through the collection of important data to optimise specific functions or services. As IoT footprints increase, businesses would also benefit from employing more functional specialists - like data scientists - and deploying more democratised analytics tools to increase data literacy and advance IoT approaches and provide input from a wide range of employees. This could all, realistically, form a critical element of an organisation's digital transformation backbone and allow them to capitalise on information they would otherwise never have had access to, providing competitive advantage and growing overall revenues.

IoT and 5G supporting the edge revolution

While IoT has become more accessible and effective over the past few years, there are also a number of supplementary technological trends that are looking to take IoT to the next level going forward.  Not the least of which is 5G, which promises extremely low latency and increased bandwidth for IoT networks. However, conceding that these bear bone improvements of 5G are likely to have obvious benefits for IoT networks, there is also a larger related concept lurking beneath the 5G wave in the potential advancements it could pose for edge computing.

As IDG Connect has reported previously, 5G is moving from conceptual to practical at a time when demand for data is at an all-time high, putting pressure on networks to keep up. Throw 5G into the mixture and this will only increase this demand, as more organisations and use-cases pop-up to take advantage of the new standard (take autonomous cars for example). This is will, in turn, foster a need for the development of a new infrastructure model, as it just isn't feasible to send that much data to the cloud for processing and analytics capabilities.

Edge computing - the concept of bringing processing capabilities as close to the source of data as possible - will rise to the challenge here, taking the impetus of performing huge amount of compute and analytics away from the cloud. Having the capacity to run compute locally will reduce both bandwidth costs, compared to a centralised, public cloud first methodology, and latency, which can literally be a lifesaver for critical applications that require ultra-low latency, such as in healthcare environments.

Ultimately, this may foster the widespread adoption of a much more decentralised IT infrastructure model, with less dependence on public cloud services, driven by advances in wireless connectivity (5G), automation, edge infrastructure and IoT. This certainly seems to be the sentiment amongst mobile operators, with 70% of them - according to a survey from Heavy Reading - attesting that the ownership of access networks and edge cloud infrastructure will give them a competitive advantage over public cloud providers in the 5G era.

This new distributed edge infrastructure model is likely to evolve alongside IoT, especially for industrial purposes. IoT is already becoming smarter than it has previously and the shift to edge priorities are likely to accelerate this, as organisations become keen to perform analytics closer to the source of data, or indeed within the devices collecting the data.

Microsoft is backing this trend through its investment in the ‘intelligent edge', which effectively shifts its public cloud offering out to the edge using Azure and Azure Stack. As a part of this push, Azure IoT edge takes containerized cloud services - like machine learning and cognitive services - and runs them on IoT devices, allowing them to carry out decent amounts of compute and analytics themselves.

Running this level of capability, which includes things like complex event processing, machine learning, image recognition and AI at the edge, represents a major evolution in how organisations use IoT and cloud services to build value and new streams of revenue. Essentially, IoT is due to be much more powerful, intelligent, efficient and useful than it once was, meaning non-IoT adopters may be missing out heavily when compared to adopters. 

While it must be conceded that we could still be a long way from seeing widescale 5G implementation within enterprise environments, and there are still challenges to iron out when it comes to 5G enabled edge computing architectures,  it's nevertheless quite clear that the IoT is progressing. There are still a lot of more tangible recent technologies supporting and advancing IoT - such as LTE-M (Cat-m1) and Narrowband-IoT (NB-IoT) - and not taking advantage of these technologies may be negatively impacting your business in ways you may not have even considered. 

Of course, this doesn't mean that every business should rush to develop their IoT profiles without hesitation, as its usefulness will always depend on a business's specific needs. Although it is certainly worth considerable investigation, especially for large organisations operating in traditional disruption-prone industries.