IoT promises the world, but can it turn a profit? - IoT global network

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IoT promises the world, but can it turn a profit?

July 12, 2016

Posted by: George Malim

Bryan Kirschner, Apigee Institute

It’s easy to see why Gartner predicts 2016 will be the year we see 6.4 billion connected things in use: the ability to operate devices remotely opens the door to a whole range of opportunities for businesses to bring an innovative service to their customers. The smartphone most of us have at hand almost every waking moment ensuring we never have to enter an unlit home or shiver in an unheated car are just the tip of the iceberg, writes Bryan Kirschner, a director at Apigee Institute.

A complex ecosystem of networks, platforms and devices belies the simplicity of these intuitively appealing use cases. These issues must be worked through for the services to be seamless, user-friendly, and ultimately, profitable.

Get fit

 An assessment of profit potential should start with a look at your current IT infrastructure, and whether it can be geared up to meet the challenge. For example: only after network load testing will you know if the complex demands of unbroken strings of environmental data will bring chaos to your current set up.

Don’t go it alone

On the one hand, it’s easy to imagine how owning a broad platform could lead to profitability. On the other, imagine being the sole provider of a connected car: between the software and the car itself, it’s a potential sinkhole for R&D investment. This is arguably one of the reasons Google’s sister company Alphabet was established. By setting it apart from Google’s main enterprise, there’s not the same impetus on making money, so more time can be spent on innovation.

Fortunately, if you don’t have the flexibility of a colossus like Google, there’s a way forward. Smaller companies can to focus on offering a specialized service, while large-scale platform providers bring the clout. In fact, there are inevitably going to be a lot of false starts and learning by doing as the IoT matures.  Unless your product is a me too that emulates an already proven success, you might not get it right first time. The key is to make the most of interoperability with emerging ecosystems to uncover opportunity, while using analytics to control risk and spend by fast failing false starts.

Openness keeps everyone API

 The big players know the value of strategic openness. Google, Samsung and other tech brands offer APIs (application programming interfaces) that make it easier to connect to IoT devices. More open access to devices and services can lead to discovering new ways to create customer value.  Moreover, where competing platforms seen irreconcilably incompatible, APIs can act as a common language for developers to create end-user experiences that draw on back-end systems that can’t talk directly to each other.

Every prospective IoT player would do well to follow the leads of these companies by taking an API-first approach.

Between the back-end, the API, and deployment, however, making interoperability between platforms secure requires a huge amount of access management. Fortunately modern web APIs can provide visibility and analytics, security and version control—and when well-managed, they can tie these metrics together with a firm knot. The scale of operation means it will have to be automated too if it’s going to demonstrate any sort of sensitivity to inputs. What use is a connected car if you can’t release the handbrake?

When to invest?

 An API platform provider should be introduced in the first instance. A failure to do so could be the difference between an expensive IoT sob story and a profitable, user-centric innovation. That’s because it is both important not to pump resources into failed experiments, while not being so conservative that vital opportunities could be missed. Take a lesson from the big tech players: your organisation must always be learning by doing and courting prospective partners. In the world of IoT, APIs are the key.