Q1: How would you describe the current state of IoT?
A1: Proof of Concepts (PoCs) rule the land, but we are seeing good traction in the industrial space, especially in manufacturing and transportation. In the UK, Hitachi Lumada is enabling “trains as a service,” and just as GE enabled new business models similar to “thrust as a service.” The approach allowed Hitachi to expand in a large new segment.
Q2: Why is it so hard to move from PoCs to commercialization?
A2: There is no shortage of headwinds. Some PoCs are not showing enough value for the cost of the PoC in the short term. The best path to commercialization is to go after scenarios where the customers have much to lose when the existing product or service does not work. It leads us to the more industrial side of IoT as the stakes and the benefits are larger. The consumer side is composed of nice to have solutions, but industry IoT impacts real supply chain and manufacturing costs. You are more likely to get traction with these folks. If an oil well stops pumping, what is the cost?
Q3: What is the most common thing that you are asked from companies trying to use IoT?
A3: Companies often ask if they can find value in an IoT solution without implementing machine learning and AI. IoT, AI and machine learning terminology is often used together in marketing, and companies believe that they need to deploy all of these technologies with IoT, and it is not true. Tremendous value can be gained from simple stuff, and the more advanced technologies can be applied after the base solution is functioning. Just connecting and remotely knowing things adds lots of value, and analytics are the natural next step.
Q4: What is the dumbest thing you have seen in the market lately?
A4: Some companies have made massive investments in things that do not add value, i.e. their own cloud. Why would most companies spend a fortune on a generic cloud platform when can easily go to Microsoft Azure, AWS or Google? Too much investment money sometimes drives bad decisions. Companies are making large investments without a clear connection to customer needs and specific use cases.
Q5: What do the next 12 months look like in IoT?
A5: I am expecting a shakeout of the hundreds of IoT platforms. Many of them do not have a sustainable business model. The platforms that work better in a brownfield rather than a greenfield environment will perform much better as they are solving existing problems. It is tough to make money building platforms for devices that have not been deployed yet. Many companies are sitting on huge troves of historical data that can easily be put to work to reduce costs and increase efficiencies.