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The New Enterprise IoT agenda for CEOs – what are the new challenges?

The New Enterprise IoT agenda for CEOs – what are the new challenges?

Posted by Emil BerthelsenDecember 3, 2014

In a recent webinar for the Industrial Internet Consortium (IIC), Machina Research contributed to the presentations and discussions around the topic of “Putting the Industrial Internet to Work.” Shared here are some of those thoughts.

Connected devices, applications and data analytics are revolutionising most industries. With machine-to-machine, operational efficiencies and performance monitoring reached new heights, introducing real-time information and a richer application and data environment. Now in the Industrial Internet, these smarter, connected products with advanced analytics present new opportunities for businesses with different challenges. In other words, a new Enterprise IoT agenda for CEOs has been put on the table.

Before discussing the opportunities and challenges, it is worth recognising the huge steps taken from connected devices to the Industrial Internet. At the building blocks level, products have become ‘smarter,’ embedded with greater processing and storage capabilities, and ‘connected’ through ubiquitous network technologies which, in most cases, now deliver bi-directional and high bandwidth capabilities, critical for remote management and actuating purposes and richer communications. Where the game changing aspects have appeared is in the real-time transfer of data and the processing speed of that data with advanced analytics tools. What this enables is data to be processed and ‘looped’ back into operational processes with actionable insights. This is underpinned by the convergence of OT and IT – operational technology and information technology. Some futurologists may now be claiming early evidence of automation and/or self-managed systems, and with more and more analytics tools becoming available (such as Watson services through IBM BlueMix), this is definitely a space to watch. For the moment, these smarter, connected products with advanced analytics have firmly enabled ‘servitisation’ of products as a competitive differentiator for companies.


‘Servitisation’ delivers some of the most significant and innovative opportunities from smarter, connected products. This concept, simply referring to the delivery of services as an integral part of providing products, has started to take shape. A number of use cases are emerging include predictive maintenance services, warranty management, usage based billing models and geo-fenced solutions. For manufacturers of products, this opens new revenue opportunities, new products and services, and new extended customer relationship models with their customers. It is particularly the new customer relationship models which will begin to change some of the existing value chains and market models, and further extend revenue realisation approaches over a longer period. Just as one common example, consider the connected car now sold with a wide range of services which directly strengthen and extend the direct relations between the owner of the automobile and the automobile manufacturer; these services may include service management, feature updates, and security solutions.

As enterprises recognise these opportunities in Enterprise IoT, and more and more begin to explore the field of smarter, connected products, particular challenges will appear as common issues. Here are a few:

  • How to turn identified business ideas in Enterprise IoT into tangible and operational results?
  • How to strike the balance between long term strategic objectives and short term solutions?
  • How to identify the significant opportunities in Enterprise IoT, and prioritise efforts appropriately?
  • How to overcome issues of complexity and lack of skills in Enterprise IoT to deliver new products and services?
  • How to structure these new customer relations and manage disintermediation?
  • How to exploit data assets without compromising customer data privacy and data ownership?

The list is far from exhaustive, and as enterprises begin to ‘operationalise’ the Industrial Internet, these questions will begin to address a scope of strategic, tactical, and operational issues. These developments will give rise to many new and innovative acquisitions and partnerships as already noted with PTC, ThingWorx and Axeda. Machina Research certainly expects additional acquisitions and partnerships to be announced between product manufacturers and IoT service enablers in the coming months.

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Emil Berthelsen

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