Historically, we can see that new economic conditions are created by disruptive inventions such as the way the Internet dramatically changed shopping, shipping, publishing and banking.
Historically, we can see that new economic conditions are created by disruptive inventions such as the way the Internet dramatically changed shopping, shipping, publishing and banking. We know as a consumer that shopping online saves time, provides more information, and reduces product prices. The product companies also reduced cost of training sales people, carrying local inventory and updating product information. Companies who moved early to leverage the Internet with a visionary strategy still exist today. Amazon, Netflix, and Google are a few. Companies that rushed to the Internet without a clear strategy ended up exploding with the dot.com bust.
One conclusion is that disruption creates a new economic equation by simultaneously reducing costs and increasing value. The Internet economy continues to evolve causing other economic shifts – the Mobile Economy, the Sharing or Social Economy. Companies like Apple, Facebook, and Uber have changed our lives.
Now the Internet of Things Economy is upon us. Technology companies say that IoT is already upon us and is here to stay. Certainly the early seeds of IoT are based on M2M and remote monitoring. The difference now is the low cost capability to collect information in remote locations, without labor, and without a fixed network. Components that create an IoT solution including sensors, microprocessors, connectivity, data storage, memory, and power cells are all available at a very low cost. When the solution cost is minimal and can be implemented rapidly, then the risk of implementing a prototype or proof of concept is also low.
At the same time as costs are dropping, value of information is increasing, particularly in industrial applications where reducing costs are key to competitive advantage. IoT creates new information that leads to automatic actions or human intervention that will change the way we live and operate our business.
Receive real-time alerts in critical situations – alerting truck drivers to dangerous ice conditions on the road ahead.
Save energy costs - turning off the lights and HVAC when no one is in the office.
Increase productivity - eliminate the need for manual checks of backup generator fuel level at remote stations.
Predictive analysis - automatically measure the rate of usage and the projected demand to determine when consumables need to be refilled.
Eliminate “fail” conditions – monitor the installed base and send replacement parts prior to failure.
Rapid customer feedback – monitor the reliability of products such as hand tools while they are in use.
When the Internet business models were developing, companies that succeeded were able to harness the power of the new economy. The same will be true for the Internet of Things Economy. It is easy to connect your “thing” to the Internet. It is harder to change your product business to create value based on less tangible analytics and information. Looking at the business as a whole and eliminating the “old way” of doing business is likely to be required in order to stay competitive. Now is the time to get figure it out, before the start-ups and competition puts you out of business. Is your company going to make it through the next wave of disruption? Are you ready for the challenge?
N³ Innovation offers business-driven innovation which is a fundamentally new model for anticipating future market realities, identifying innovation opportunities, and accessing new sources of revenue. We have helped companies identify new business opportunities, typically with revenue potential over $250M. Contact us to learn more.