The IoT Platform Jigsaw – Buy or Build? (Part 2/4)

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In this instalment we explore how commercially available platforms, including M2M platforms, might be an option for you.

Once Upon a Time – A Small Group of M2M Platforms

M2M Service Providers have been using the term M2M Platform for years with their enterprise customers. The main functionality of these carrier-grade platforms was to manage connectivity through a secure, fast and reliable private network via dedicated hubs directly into each of the major network partners.  They allowed control of multiple network SIM estates, management of SIMs and devices and finally management of their billing administration in line with their own systems and procedures.

Most M2M Service Providers developed in-house M2M platforms but also in parallel they acquired  M2M platforms from vendors such as Cisco Jasper Control Center, Ericsson Device Connection Paltform (DCP) , Cumulocity, and Telenor Connexion , among others.

With the hype around IoT, M2M Service Providers become more interested in offering their enterprise customers an IoT application development environment that can reduce time, cost, and complexity of deployment of solutions, that can optimize their business processes and help them deliver better and faster services.  An early example was Etisalat leveraging ThingWorx IoT Development Platform, announced in 2015.

Which brings me to a mobile network operator (MNOs) – Can they avoid the temptation to develop their own IoT management and application platforms? The complexity of IoT value-added service (VAS) development and deployment demands a continuing operational and commercial effort.

My recommendation: MNOs should instead consider partnering with well-established technology vendors in order to accelerate time to market and create customer value through innovation.

Buy or Build an IoT Platform – Making the Right Decision

Technology companies have spent years adapting their sales pitch to convince their customers or potential customers of the advantages of buying commercial products or ultimately IaaS, PaaS or SaaS platforms. On the other hand, many companies across industries see a risk that their business will depend on suppliers and fear being captives of these technology providers. Their management team and tech leaders have found enough arguments to develop their solutions from scratch.

The eternal dilemma, whether to build from scratch or buy a commercially available off-the-shelf (COTS) IoT Platform to support the needs of the enterprise will continue for a while. Here’s what you need to know about both approaches before making this critical project decision.

  • Step 1: Validate the need for an IoT platform. Focus on validating that a business need exists prior to deciding and estimate the return on investment (ROI) or added value.
  • Step 2: Identify core business requirements – Involve the right business people. This will determine the success of the process.
  • Step 3: Identify architectural requirements – It is extremely important to identify any architectural requirements and follow the status of the confusing IoT standards world, before determining if a COTS or custom solution is the best choice.
  • Step 4: Examine existing IoT Platforms – At this point, a business need has been pinpointed, ROI has been estimated, and both core business and architectural restrictions have been identified.  Now, you should take a good look at existing IoT vendors (a short list of IoT platforms, to be more concrete).
  • Step 5: Evaluate your in-house skills to support a custom IoT platform – It takes many skills to design and deploy a successful IoT platform that is both scalable and extensible.
  • Step 6: Explore if a COTS IoT platform fits your need – If your organization does not include a development group comprising personnel experienced in designing IoT solutions to support your enterprise-wide business solutions, a COTS IoT platform will probably provide the best long-term ROI.

More considerations for choosing an IoT platform coming up in the next

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The IoT Platform Jigsaw (Part 1/4)

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When I published “It’s an IoT Platform, stupid!” in 2015 , I did not think that it would be one of my most visited and shared articles.  I am proud that just in LinkedIn, this article has received more than 8,000 visits. That´s why I have chosen an update of that article to initiate my collaboration with Ecosystm.

When in late 2013, I decided to relaunch my company OIES Consulting with a focus this time on Advisory services for Internet of Things (IoT), I thought the selection of IoT platforms would be one of the most useful services that we would offer and certainly one that would bring more benefits to the clients wishing to accelerate the adoption of IoT.

At that time, I had identified about 60 IoT platform vendors and despite guidance from research firms, the confusion was brutal. Today it is worse – there are more than 600 platform vendors and the expected market consolidation still has not arrive. Like other analysts and bloggers, I tried to maintain, classify and publish a list of IoT platform vendors but it looks like an impossible task. However, it is a matter of 2-3 more years.

You must agree with me that the IoT platform market needs a quick and urgent consolidation. Hopefully, in the magical year of 2022, we will be talking about no more than 50 vendors at the most.

The Confusing Market of IoT Platforms

But first things first. How to define an IoT platform? How to differentiate between a Connected Device Platform (CDP) and an Application Enablement Platform (AEP) and an IoT Middleware and a Service Enablement Services (SES) platforms?

Not All IoT Platforms are Created Equal”, it has been said before, and we must understand that the current generation of IoT platforms probably represent the first iteration in this space. But there are marked differences between the different types of platforms. As an organization looking to embrace an IoT platform, this initial diversity can result very confusing. Sean Lorenz from Xively rightly said that the “IoT Platform” is such an overloaded term that its meaning has been lost. Chipset manufacturers, sensor manufacturers, software vendors, consortia and system integrators all have their own definitions.

We find out there with a large number of companies that offer us IoT platforms in the cloud or on premises; for horizontal or vertical implementations; for embedded software development or industrial applications development; with data capture and real-time analytics capabilities;  with devices and protocols management capabilities; with connectivity to any network; for developing applications for smart homes, for smart cities, for connected vehicles, for wearables….. the list continues! Tech buyers are understandably confused in their choice of IoT platform. The global Ecosystm IoT Study reveals this confusion.

 

In such circumstances it is preferable to avoid arguments about which is an IoT platform and how we categorize them. My recommendation here is to ask for help from specialized IoT consultants. They will be able to give you specific guidance based on present and future business needs and can help in the IoT platform selection.

Over my next few blogs I will attempt to guide you through the significance of the different kinds of platforms. It will surely help you in your IoT platform choice, keeping the needs and capabilities of your business in mind.

Stay tuned!

 

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IoT is a Strategic Initiative – It’s time to Rethink Business Models and Cut Waste to Sustain in a New Era

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There have been several productivity improvement techniques such as Kaizen, Total Quality Management (TQM), Business Process Reengineering (BPR), Lean Manufacturing, Lean Thinking, Lean Maintenance, Six Sigma, ISO Certifications and Business Process Management and others. These waves of productivity improvements focused on certain core principles such as:

  • Cutting waste from processes
  • Bringing transparency to decision-making
  • Empowering users through better involvement and cross-functional information
  • Improving quality, cutting costs, improving business velocity and improving customer satisfaction

These productivity improvement initiatives provided incremental benefits to the industries where they were implemented. However, companies often were satisfied  with the marginal benefit they could manage to derive from their business improvement initiatives.

How Productivity Improvement and Enterprise Software Solutions are Implemented?

In the last 20 years, enterprise solutions like ERP, SCM, HCM, and CRM were at the forefront of digitising business processes. Many companies have tried to implement these solutions without a thorough analysis of achieving real business outcomes and deviations from current business models. As a result, there have been many cases of wasted investment and time, where software solutions have been implemented with little to no additional gains.

To eliminate the risk of such technology implementations, while at the same time better manage the projects, an array of implementation methodologies has been designed by consultants. Positive collaboration between a company and its consulting partners yields positive results. However, such high-level revamping of business models has not  been considered mainstream in traditional industries.

Startups on the other hand have experimented with new business models. We have all seen the emergence of new industries such as eCommerce and eGovernment and new initiatives such as Online Advertising, Mobility Apps, and Internet Banking. In many ways, these industries have brought significant changes in our life. In the coming era, we perceive the need to bring changes in the business model in conventional industries.

Emergence of IoT for Process Improvements

One of these new technologies companies are implementing is Internet of things (IoT). Many companies are considering the implementation of IoT solutions in a variety of different ways. These companies need to justify their projects and apply deep thinking for value creation. To bring process value, we need to answer questions such as:

  • What is the purpose of a process?  
  • Can we eliminate it? If not, can we simplify it?
  • Can we do the process in a better way?
  • Can we improve the quality of product, process and relationships?
  • How can my processes add better value to the company?
  • Can I create better outcomes?
  • Can I implement IoT now and create a differentiator?

IoT in a true sense is much beyond the installation of sensors on products, equipment, locations and people. IoT includes a myriad of solutions such as asset tracking, predictive maintenance, remote diagnostics, chatbots, drones, machine learning and artificial intelligence – the list is almost endless. In a fully-fledged IoT implementation, machine-to-machine communications would be used to eliminate human errors and provide rapid decision-making. The challenges of IoT entail integrating multiple partner’s product stacks into your solution while keeping it seamless for your end-user.

IoT implementations are iterative in nature and therefore the best implementation practices have yet to be evolved. We have formulated methodologies that trigger value creation validation at every stage of the methodology i.e. from the Ideation Stage to the Deployment stage. We need to create the value not in terms of incremental benefits but also changing the business model of the company itself. Start-ups challenge traditional giants not by evolving incrementally but by providing revolutionary new advancements. New business models would need to be delivering improved value to the customers in a much more personalised manner. New business models will need to address new pricing strategies as well as new positioning, new partnerships, new order fulfillment structures and new modes of customer value delivery.

Rethinking Business Models

Companies need to seriously think about an IoT project as a strategic initiative. IoT can immensely help companies in deploying creative ways to become efficient. IoT implementations cannot be approached the same way as a software implementation. In an IoT project implementation methodology we would not only focus on processe improvement and cutting waste, but we would also ask fundamental questions about the way relationships are maintained with the customers and within the company. While implementing an IoT solution, we need to make sure that we have answered some tough questions regarding  our business. Secanarios such as this could arise:

Currently a train manufacturer sells trains to the railways. Railways then become the equipment owner with full responsibility of operating and maintaining the trains. The railway’s real job is to transport people from one place to another. However, a huge chunk of resources is spent in maintaining the trains and assuring high reliability. With IoT, the maintenance may be outsourced to the equipment manufacturer. All operations and maintenance data is captured in the system and the equipment manufacturer is a party to providing reliable service. With the maturity of technology and acceptance, a time will come when railways will ask, “What is my real business? Is it operating trains or is it maintaining trains? Can we collaborate with the equipment manufacturer to maintain the train? How do I know that the equipment manufacturer can do the right job and assure high reliability?”

These questions are difficult to answer because of the separate value models assigned to the ecosystem partners. However, IoT technology is changing business boundaries. Train manufacturers and train operators can now start thinking of offering new business models by remotely predicting and diagnosing faults. Over a period of time, with trust having been established, railways and train manufacturers can even think of changing their pricing model based on the number of passengers being carried, or distance travelled with incorporated reliability standards.

This is a simple model in which an IoT product enables value creation through closer relationships between supplier and customer, and by rethinking the ways current business models need to be tweaked. When we design the new business models, we should surely ask some relevant questions like:

  • Is my IoT business model cutting costs, improving productivity, improving user motivation and/or increasing revenue?
  • How are new delivery models eliminating or reducing inefficiencies?
  • How am I collaborating with the players I never thought of collaborating with earlier?

The future holds a new era of high productivity. Moreover, a plethora of new industries will naturally sprout with the emergence of new business models created due to technologies such as IoT. Companies should closely focus on value creation using new business models and align all resources as required by the new business model.

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