The trick of picking the right partners for IoT apps
It is understood that no one can provide everything, end-to-end, for IoT applications, regardless of the sector. This means ecosystems of partnerships and platforms are not just unavoidable, but essential and choosing partners is difficult, writes Annie Turner. While the focus often is how easy and quick it is to onboard them, less attention is typically paid to how easy it will be to part company with minimal disruption to the business
With that in mind, a good place to start before looking for partners is gap analysis – what do you need to address your most pressing issues and what pieces are you missing before looking for who can best fill those gaps. One of the most common areas to choose are predictive analytics to avoid losing revenue through downtime.
Pierce Owen, principal analyst at ABI Research, advises, “You should choose partners that will help you solve problems and accelerate innovation. This means partners who can help you connect your assets and extract useful analytics out of your data, but also partners who understand the next wave of transformational technologies. That means they are already experimenting with machine learning and artificial intelligence (AI), because there are companies that have skills in these technologies and receiving returns on their investment.”
Maciej Kranz, the vice president of Strategic Innovation at Cisco, gives a great example of this. Goldcorp mines gold and typically lost US$2 million a day when a specialist vehicle broke down. The only way to recover the faulty vehicle was by using another one, adding to the expense. The company started using sensors for predictive maintenance and reduced the failure rate by 80% in the first three months. By adding AI, that has been cut by 95% using fully autonomous capabilities.
Recent research from ABI showed that the top desired outcome of applying emerging technologies to a manufacturing organisation was improved data outcomes, although the same survey showed a lack of skills and experience was in the respondents’ top three inhibitors to embracing innovative technology. Clearly a great opportunity to pick a specialist partner.
However, the subject of sharing and controlling data is a sticky one. Owen suggests that one of the reasons GE Digital has had to rethink its digital ambitions is that, “They set up partnerships, but then didn’t let them get on with what they excel at – GE wanted control and other companies weren’t happy to hand over control of their data to a third party. That was a big problem,” he said.
Platforms in the B2C arena have proved the most successful and fastest way of growing a business that humans have ever devised. They bring together producers, sellers and buyers of goods and services who previously didn’t and perhaps couldn’t easily transact.
However, when choosing a platform partner, you need to think carefully about their business as well as operational model. The B2C platform business model puts the platform owners in a position of supreme power – the most successful are among the world’s biggest, most valuable and most profitable organisations. Aside from taking their cut of each transaction, such as Amazon or Apple, much of that power comes from the data they amass, collate, analyse and use to constantly refine and develop their own products and markets, as well as, in some cases, selling data to third parties in the style of Google or Facebook.
And incidentally, it is important to consider geography and culture too: Bernd Gross, the senior vice president of IoT and Cloud at Software AG says, “Lots of clients have global rollouts and customers in China want [cloud] services on Alibaba not Microsoft Azure or AWS. Platforms must not have solution that will only integrate with one hyperscale platform.”
So just how open and transparent is that platform? Who is benefiting from your company’s data? Who has what control over which data and what they do with it, where and for whom? These are the big questions regarding platforms for reasons that stretch way beyond the regulatory. They are about protecting your business, your customers and your reputation too.
As partnerships become more prevalent and important, one solution for these concerns could be blockchain. Emmanuel Marchal, the managing director of ConsenSys, explains, “Using blockchain you can have multiple parties operating together and streamlining their processes together, but without giving control of their data to any third party.”
Data security and privacy concerns are the top inhibitor to companies adopting innovative technologies (see graph below) according to recent findings by ABI Research, although, in all spheres most security breaches are due to basics being overlooked. Gross remarks, “Securing the platform is obvious but underestimated – people forget to secure the devices they attach – such as the one with the open Bluetooth connection.”
Sometimes data security fears are given as good reasons to avoid connecting up systems, but this is flawed and short-term thinking. It’s true that many manufacturing environments, for example, have dedicated systems for specific functions that were not designed to be linked into larger systems or ecosystems. Over time, they will become obsolete or evolve to become part of a data-driven environment through the use of standardised interfaces and protocols.
Beware of partnering with any company that is resisting the move towards open protocols and interfaces. As Andreas Geiss, a vice president at Siemens, says, “If their USP (unique selling point) is proprietary, it’s definitely time to change. Moving away from that opens [them] up to competition, but standardisation increases overall market size and makes it more transparent and commoditised – that’s the name of the game.”
So a partner should have a clear plan of how to move towards developing standards to ensure they will be sufficiently flexible and interoperable in future, rather than locking their partners into expensive proprietary ways of working.
Standardisation and greater openness also means more security concerns. Somewhat ironically, securing IoT will only be possible through partnerships because no single company has the whole suite of skills and products. Keep an open mind here. Data security will bring many new and at first glance unlikely potential partners into the mix. For instance, don’t overlook security service firms with experience in consumer markets for securing IoT connections. They understand the threats to and defences for standards-based and Internet technologies – the very things that will propel IoT into the widest possible range of applications and segments.