14 Ways IoT Will Change Big Data And Business Forever
The Internet of Things (IoT) has gained momentum. Sensors are now small and cheap enough to embed in all kinds of devices, and more companies are leveraging the vast data generated. Here are some key drivers your company needs to remember as you jump into IoT.
Gartner expects 6.4 billion "things" will be connected to the Internet in 2016, up 30% from 2015. Although sensors aren't new, they're being built into more types of devices because they are considerably smaller and cheaper than they once were. More organizations, regardless of industry segment, will embrace IoT devices to lower operating costs, increase revenue, or provide more relevant customer experiences. The road to success comes with pitfalls, however, some of which can be avoided or minimized with little effort or cost.
[Learn more about the Internet of Things (IOT). Read 6 Internet Of Things Building Blocks.]
The obvious problem is the sheer volume of data. Cramming every piece of sensor data into an existing data warehouse or a cloud environment probably isn't practical, or even wise.
"The different approaches to data management have revolved around building enterprise data models and integrating data from different places and then making them look the same. That was expensive and cumbersome, but it was doable," said PricewaterhouseCoopers (PwC) partner Oliver Halter, in an interview. "No matter how much money you throw at it, traditional data management, from a process point of view, doesn't work anymore because you get new data sources and new types of data all the time that you have to integrate very rapidly."
Moreover, many organizations have no idea what they would do with IoT data if they had it. If the potential business value can't be defined, there's little that can be gained from adopting even the coolest IoT innovations.
"Before you think about software or technology, what's the business problem you're trying to solve? If you're an executive at one of the companies we work with, you're losing 2% of revenue to fraud or sensor malfunction. And 2% of your revenue may mean $100 million," said Houman Behzadi, senior vice president of products at enterprise application software provider C3 Energy, in an interview. "If you want to be successful, you have to solve a business problem like fraud."
Here are a few of the ways the IoT can impact companies' IT infrastructures and data strategies, and the bottom line.
The organizations embracing IoT devices see exponential increases in the amount of available data. The deployment model has been to grab a sensor message and then communicate the message through an IPv6 protocol to a machine cloud. However, as the volume of data increases, that model may no longer be viable.
"If I'm capturing the temperature readings [of assets or equipment] every second, most of those readings are inconsequential and I reduce the value of the payload of the data by sending it all," said Don DeLoach, co-chair of the ITA Midwest IoT Council, in an interview. "One of the downsides of storing vast amounts of data is [the time to insights]. If each dataset is over a petabyte and I'm running complex queries, it might take five hours just to get my answer back. If I don't even know if I'm asking the right question, that's a big price to pay."
IoT devices allow organizations to collect more information than they need. Therefore, companies should think about how they're going to collect the information and how much they need to store in their own systems versus the cloud.
"The IoT provides opportunities and challenges. You can't just let data rest in the cloud waiting for people to get it. You have to make it available so people can make decision," said Mark Jacobsohn, SVP of strategy and consulting firm Booz Allen Hamilton, in an interview. "You also have to think about your processes and how to make more information available to more people so they can act on it."
Cameras are everywhere but the data isn't necessarily being combined with other sorts of data. Despite technological advances, security guards are still watching banks of computer screens to determine whether the surveillance cameras have captured any anomalous activity. That sort of use case is ripe for IoT device assistance.
"Video takes a lot of bandwidth and people have to watch it. There are also privacy issues when it's stored somewhere. It may capture more information than you need," said Michael Tusch, CEO of camera and display subsystem provider Apical, in an interview. "We're able to extract data from image sensors found in phones and security systems at the edge. The image sensor streams out data and describes things it sees like cars, people, and signs."
Telcos, service providers, and large enterprises are using the image sensor data to improve the accuracy of things like home alarm systems and surveillance systems. Home alarm systems have been using motion sensors to detect the presence of a person but they are unable to distinguish between a person who belongs in the environment and someone who does not. Image sensors provide another layer of granularity, enabling greater accuracy and efficiency and reducing the number of false positives.
Companies have been using periodical data for business intelligence (BI) purposes for decades. As the cost of collecting and storing data has continued to fall, more organizations are taking advantage of faster data access as driven by business need. When businesses embrace IoT devices, streaming data is something they need to consider.
"One of the things companies need to think about is real-time and near real-time data streaming in from more places than it was before," said Mark Jacobsohn, SVP of Booz Allen Hamilton. "The IoT allows us to apply data science and approaches to big data in areas that we haven't been able to do before."
Some IoT devices provide contextual information that is absolutely necessary for predictive maintenance, controlling traffic flow, and marketing more effectively to consumers, for example. With it, organizations can understand why humans and machines behave differently in one context versus another.
"There's this concept of environmental intelligence and situational awareness. We spend 80% of our time identifying challenges, but what's the contextual environment we're collecting that in? When you couple contextualization with predictive analytics, intelligence at the edge is most helpful," said Jon Kirchner, SVP of corporate strategy and product management at satellite communications and network solution provider Globecomm Systems, in an interview.
IoT devices generate a lot of data, but who owns the data, and who should have access it? The device manufacturer? A service provider? The owner of the IoT device? Other third parties? The answer may depend on the device, the information it generates, who requires the information and for what purpose, privacy and security issues, and the environment in which the device is operating. Is it a standalone device or is it integrated into a Web of IoT devices?
"It's really important architecturally to design these systems so that you can cleanse, enrich, and publish this data to consuming constituencies, whether it's [a fast food franchisee], their insurance company, or the FDA," said Don DeLoach, co-chair of the ITA Midwest IoT Council. "If I'm a lighting manufacturer I'm happy to get the data and own the data, but at some point a hospital, restaurant, or retailer will say they want the data and that will change the discussion."
The whole discussion about collecting, storing, securing, processing, analyzing, and using data needs to be revisited when contemplating a move to the IoT. Given the volume of data IoT devices generate, a lot of data-related concerns will need to be dealt with in an automated fashion, such as what data should be retained or acted upon, and who has access to the data and for what purpose.
"The biggest issue is governance -- who owns the data, who's the steward of the data, and how privacy is protected. The importance of governance in the deployment architectures will become more important," said the ITA Midwest IoT Council's DeLoach.
The IoT is enabling companies to collect more information and more detailed information about people, places, and things than ever before. Companies should understand what privacy policies are in place now and how the IoT may impact those policies.
"Automobiles and autonomous vehicles are now IoT hubs that have Bluetooth and 3G or 4G networks. There could be interesting information about where somebody drives, what time they were there, what's happening, and what sort of information is being communicated back and forth," said Booz Allen Hamilton's Jacobsohn.
Organizations need to make a point of understanding the information they're collecting, whether it's sensitive, how people would feel about it, and whether waivers are necessary. They also need to understand what information they don't necessarily want that they may collect anyway, and make sure to secure it if it's sensitive.
The greater the volume of data, the more likely it is that an organizations will need to use machine learning to make sense of it.
"With the volume of data we have now, it's no longer a manual or human kind of computation problem. You need a machine to identify the correlations across a significant volume of information so you can do things like predictive maintenance on assets," said Houman Behzadi, SVP of products at hardware and software solution provider C3 Energy.
An East Coast utility company was trying to understand the health of its sensor network, and it was endeavoring to prevent fraud. Using simple analytical rules on data sources, the company was identifying a couple of hundred fraud cases a year, but the method was only 30% accurate. Using machine learning, the utility company was able to identify 20,000 cases immediately, and it eventually achieved a 90% accuracy rate, Behzadi said.
The adoption of IoT devices can be as pointless as other types of technology investments. When purchases are made in the absence of a business purpose, companies struggle to realize the value of their investments.
"It's not just about grabbing and aggregating data. You have to start with an analytic in mind. What are you hoping to achieve and what are you hoping to get out of a project like this?" said Shawn Rogers, chief research officer for the information Management Group at Dell, in an interview. "Start where you've already got something good going and see if you can optimize it. Lead with analytics and what you can achieve. Make sure you have data management and data integration infrastructure. You also need to make sure you have an advanced security strategy and the ability to execute."
Like mobile devices, the IoT enables new business opportunities that are powered by a combination of the devices, sensors, software, and data mashups. We're already seeing the seeds of such innovation in fitness devices, smart cities, and smart cars.
"We'll see innovation on the environment side such as using IoT devices to promote clean water. When we connect the energy grid and distribution supply, hopefully we'll use resources more efficiently," said Frank Palermo, SVP of the technical solutions group for IT consulting and services company Virtusa, in an interview.
In addition to the broad-brush trends, individual companies will have a new innovation vector that will be used to create new sources of revenue. For example, one of Dell's mobile phone company customers is using advanced analytics to create a banking division that will serve people who do not have access to banks in emerging countries. They're using data from the phone and third-party sources to determine creditworthiness so what is now an unserved market can get access to products such as unsecured loans and microloans.
Spend five minutes at any bar and one observation you'll likely make is how much beer is wasted at the tap. What's not obvious are the profits lost due to spoilage, under-ordering, and over-ordering. It turns out that the draft beer industry has a huge data problem that adversely affects the bottom line.
"There are 6 million types of beer sold in the US. The opportunity cost of a beer that's not available is equivalent to Harley-Davidson's annual income: $100 million a year," said Steve Herschberger, CEO of hardware and software solution provider SteadyServ Technologies, in an interview. "You need a UPC code so you know where the beer is and what it costs. You also need a way of sensing what's going on in a keg so you can understand its depletion at a specific location at a specific time."
Using the sensors and the platform, bars, restaurants, beer distributors, and brewers are able to more accurately forecast and manage supply and demand, which helps reduce operating costs and improve profitability for everyone in the value chain. Also, instead of relying on highly inaccurate data that's nine to twelve weeks old, users can get more accurate data in near real-time. The accuracy and timeliness of the data are important because draft beer cannot be sold legally after 90 days.
The IoT has a lot of maturing to do before it reaches its full potential. There is a lot of standards work to do; industries have yet to imagine the potential; and there are many technical challenges to solve.
"The ability to get information in real-time or near real-time is the benefit of these remote technologies. That's a classic big data challenge because there's a lot of data and the initial effort is to develop a signature for each patient so we can detect aberrations in a patient's experience," said Larry Schor, SVP of corporate development and analytics at health management software provider Medecision, in an interview. "IoT devices are not being adopted in large numbers yet because the economics don't make sense yet. There's no standard of practice that requires them."
There's a lot of noise about FitBits and similar health and fitness monitors, but at this point doctors care less about the patient's actual data and more about whether they own and use such a device. Wearing the device indicates that the patient is health-conscious, but it does not necessarily guarantee that the patient is any healthier than anyone else, Schor said. Apparently, such information is of more interest to health-conscious individuals, their employers who want to reduce the cost of insurance premiums, and health insurance companies.
The IoT has a lot of maturing to do before it reaches its full potential. There is a lot of standards work to do; industries have yet to imagine the potential; and there are many technical challenges to solve.
"The ability to get information in real-time or near real-time is the benefit of these remote technologies. That's a classic big data challenge because there's a lot of data and the initial effort is to develop a signature for each patient so we can detect aberrations in a patient's experience," said Larry Schor, SVP of corporate development and analytics at health management software provider Medecision, in an interview. "IoT devices are not being adopted in large numbers yet because the economics don't make sense yet. There's no standard of practice that requires them."
There's a lot of noise about FitBits and similar health and fitness monitors, but at this point doctors care less about the patient's actual data and more about whether they own and use such a device. Wearing the device indicates that the patient is health-conscious, but it does not necessarily guarantee that the patient is any healthier than anyone else, Schor said. Apparently, such information is of more interest to health-conscious individuals, their employers who want to reduce the cost of insurance premiums, and health insurance companies.
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