IoT Business Models and Monetizing IoT Ideas

As per many predictions, IoT is a multi trillion dollar value creation opportunity. And everyone is trying to position themselves as a comprehensive end to end player in that space. This includes

  • Appliance manufacturers- Samsung, LG, Hitachi
  • Industrial automation players – Siemens, Honeywell, GE
  • Semiconductor manufacturers – Intel, ARM, STM, Mediatek
  • Large technology companies – Amazon, Google, IBM, Microsoft
  • IT service providers – Infosys, Accenture, HCL, TCS
  • Consultants -E&Y, KPMG
  • And many more

As we interact with and train many players, experts and stakeholders in this space, we have realized that while everyone is excited about the opportunity, many of them are still not clear about their game plan and are also not in a position to provide comprehensive reliable solutions and services.

The reasons are many including inherent complexity and uncertainty of solutions, having the right partner ecosystem, right talent as well as identifying the correct sweet spot based on your core competence, market you are operating in and the opportunities that exist

After having spent almost 3 years in this space and after implementing multiple successful and some not so successful solutions, we have realized that IoT is too big an animal to tame in a one go and a very focused and strategic approach is needed to get the right mix of value chain positioning, vertical selection and picking up the right technologies and architecture. Breaking down the problem into smaller pieces, managing the customer expectations so that they don’t consider IoT as a silver bullet that solves all their problems is also very critical.

The other tough challenge is to come up with the right value proposition and justifying the RoI of the investments. Especially because the initial investment will be towards getting the required network, infrastructure and business processes in place to bring IoT into current operational processes and technologies. Especially evident in shift from Industrial M2M systems to IIoT/Industry 4.0

A big mistake could be to try and eat the entire cake alone. There are too many components and too many technology, architecture and business process trade offs to be taken to rationally be able to get your hands around. The key is to rapidly go-to-market with minimal upfront investment. Leveraging existing commercially available systems effectively should be part of the core strategy.

Axelta is one of the few companies world wide that has built expertise across the value chain. Right from sensors, to wireless networks, to hardware platforms to cloud based platform and mobile apps. Our IoT enablement ecosystem – Osmosis, is time tested and can provide 80% of the pieces out of the box for solving your business use cases. We also have excellent experience of practical problems faced in the field after having deployed multiple solutions in the market to be your partners to develop and deploy solutions in a reliable, cost effective manner. Check out more about our ecosystem, case studies and more on our solutions site. Axelta has also done some path breaking work in computer vision and video analytics

Axelta also have the entire set of services from getting you started through our IoT bootcamps. Get deeper into technologies through IoT analytics program and other technology training, consulting services, engineering services and more. The chart below explains how we can partner together.

Below is a link for a webinar we had conducted where we covered many of the aspects I have listed above. Contact us at corporate@axelta.com in case you have any requirements that you want to partner with us for any training needs.

Connect with me at:

Manish Agarwal – manish@axelta.com, LinkedIn

Co-Founder – Axelta Systems

Career Opportunities in IoT

Internet of Things has opened up an amazing number of new use cases and innovation opportunities for businesses across domains and verticals.

We have been surveying this space and recently did a webinar on the subject where we shared our insights on professionals from different background can prepare and benefit by being early adopter in this space.

Interestingly, IoT has no new technology but its the combination of many that makes the magic happen. So, professionals and subject matter experts in their respective areas just need to understand the end to end piece to steer their career in the direction of IoT to make most of the opportunity.

Axelta is largest IoT trainer in the world and has built a unique program that we deliver online. We have trained more than 500 professionals world wide with 100 each at Intel and MindTree. You can get more information about this training here. Or you can check out our 5 mins Video that gives a very quick view of the training.

Outsourcing / Off shoring in Internet of Things – Next big opportunity – Part 2

As promised, this is the second part of my view on Outsourcing / Off shoring and IoT.

Since IoT is still in an early adoption stage, there are mostly pilot projects being done in serious business applications. Given the research-oriented nature of these projects and the maturity [or lack of it] of the IoT platforms being used for them, most of the work is getting done in-house or by the platform vendors. As these dimensions are not conducive for outsourcing being successful. Cost is also not a major factor because the finance guys are also getting their financial models in place to ascertain the ROIs on such investments.

When IoT adoption moves to the next phase [after having proven their worth in pilots] to actual deployment across different divisions and across the globe, there will be a huge need of resources across different technologies including platform specific insights. Cost and availability will play an important role in that phase. Outsourcing and IT services firms, need to and are preparing for such eventualities.

There are a few factors to evaluate on how / where should the services organization focus on to prepare for this opportunity.

  • Technologies – IoT is a coming together of multiple technologies namely
  • Hardware / PCB – design and development. Gateway
  • Embedded development – including knowledge of protocols like MQTT, 6LoWPAN, CoAP, XMPP, etc, IoT Gateways play an important role in this
  • RF related development – including ZigBee, Z-Wave, Bluetooth / BLE, etc
  • Cloud development and deployment – Data streaming, complex event processing, etc
  • User interface for managing devices and newer workflows that emerge from these deployments. This includes mobile-based development and development platforms.
  • Big data and analytics – for generating intelligent business insights from the large data coming from the sensor nodes
  • Last but not the least, integration of the IoT systems with the existing enterprise solutions deployed

There are certain areas where existing IT services vendors are quite proficient in and can quickly scale up. Though, other areas will be very new for them and they will have to either tie up with specialized vendors or start building their competence on.

An obvious question here will be whether there will be a need of resources who have knowledge of all these technologies and their interaction or having competence in individual areas would suffice. This question is still out in the open, but my view is that a combination of the two will be needed. This entire system being too new to a majority of the folks, not having deep understanding of how these operate and the challenges around them will not make them very effective. Keeping this in mind, Axelta has recently launched a weekend [2 days] training cum hands on workshop to get the engineers experienced with all aspects of these technologies and their interaction.

  • Domain – I mentioned in my previous blog on this topic, domain will play a more important role than ever in successful deployment of IoT solutions. I had brought about this point in my first blog post IoT – connection between real and virtual world where I had mentioned that vast gap between real and virtual world is getting bridged through IoT. Therefore, people who have worked in the real world are deep subject matter experts in that space will play a very critical role in success of IoT. Which means, that besides the consultants and analysts who have built a reasonable understanding of the domains / verticals through study and consultation, folks who are embedded into the verticals will be needed. That is an opportunity for the industry people but a challenge for IT services organizations
  • Product – IT Services firms have till now depended on just the services. Which has been very linear model and over last decade, there have been a lot of cost pressures on them. There have been many attempts to move up the value chain and build products that can move them away from the linear model. Though, the success in such investments have been very limited. Main reason being that the entire management structure and the overall engine has been geared up for providing IT services. Given that this is an entirely new area and there is a space for multiple new players, IoT throws a very good opportunity to these firms to make the transition. The challenge though being that they still have the same engine that is geared to get more head counts and more billing. A very good option for these firms could be to dig into their large cash piles and buy out some of the IoT start ups in India or in the western world. Give them funding and freedom of operation, nurture them like CISCO has done in the past and like Microsoft Ventures does and then absorb them over next few years

Focusing on product / platform is also important at this point in time because that is where most of the action is happening right now and will happen over next couple of years at least. Till the time a few companies emerge as the leading contenders like SAPs and Oracles and Googles of the world.

  • Managed Services – This has been a trend over last decade which has now picked up momentum. Where industries outsource their entire IT or IT enabled services to outsourcing firms. IoT will need much more of these managed services. It will also enable such outsourcing through larger automation and bridging the gap from the real world. IT services firms that gear themselves up for providing managed services leveraging their or external platforms have a lot to gain from IoT over next 5 to 10 years.

To summarize, IoT and M2M is a brilliant opportunity for IT services firms for ensuring their growth and profitability over next decade but they will need to get their strategy right as well as be ready for changing their proven models to succeed in the IoT outsourcing world of the future.

 

IOT start-up/Any startup: the prerequisite’s

The world has woken up to the tremendous potential of IOT devices. There are literary hundreds of start-ups springing around us across the world. Some will succeed, many will fail. What is it that start-ups in General and IOT start-ups in particular should focus on to succeed? This is a million dollar question. Let me try and answer some of the things I have learnt:

1. Focus on the business problem/Use case you are trying to address. Many start-ups start making a very specific product but somehow end up making a very generic product. They want to take care of all possible scenarios and cover everything. Especially start-ups making software products put in a lot of energy and time in making generic solutions. This path is fraught with danger of delays, overspending and many end up making a product which does not fit anywhere. My suggestion is focus on your use case. Bring clarity in it. Make your solution work covering 70% of the use case requirements. Launch it ASAP, learn from the feedback and improve. This is especially true for IOT where you have several companies making generic device management platforms, very few focussing on specific use cases. Number of such platforms that will finally win will be limited, but if your use case has specific relevance, it will win in that market.

2. Focus on technology but… Define the technology you are going to use as soon as possible and do not get carried away with recent advances. Many of the recent developments are not yet stable/usable enough to be good for you. A company can lose lots of valuable time in travelling on these new unchartered paths only to realise that the technology either does not meet their ultimate need or is not mature enough. Developers might lose lots of valuable time in learning these new technologies only to get disheartened and I have seen this leading to attrition etc. Let others use them first and then you can follow at a much faster pace. IN IOT space this is critical as so many new things are happening daily. Keeping the clutter out should be clearly high in your thought process. Get that device working first, fully and make it robust.

3. There is no such thing as stud.. As a start up, already lots of pressures are there to get a good team in place. What I have seen is, getting high end tech talent is extremely difficult and is generally not needed. Especially in IOT space, everything is so new, that getting excellent people in any area is difficult. My suggestion is hire good people who have the right attitude. For the electronics side (if you are into device building) you can get good electronics background people in India who have experience in working in those 100’s of electronics companies in that are cluttered around Govt undertakings like BEL, BHEL, DRDO etc. They are good and have manageable salaries. Similarly on software side, target those thousands of MOM and POP companies having 1-2 clients that dot in Hyderabad/Bangalore/Pune etc. Make sure in the interview that they understand that in start ups, real returns will come in only after some time and lots of hard work needs to be put in. Do not hesitate to negotiate hard on salary.

4. Financing (Angel investors, crowd sourcing etc..) Recently I met a guy who was co-founder of a start-up that grew 20 times in 2 years. He has just quit. Why? Could not handle financier’s demands and growth targets pressure, direction financier wanted the company to go. Although financing might be mandatory at some point of time, In India, it’s very much possible to run the show on a very shoe string budget. DO NOT spend your live savings but develop some mechanism so that basic requirements can be met. I will speak about it more in a subsequent post.

TO BE CONTINUED….