The Internet of Things – Is it a game changer?

The Internet of Things (IoT) is hotter than ever. Barely a day goes by that we don’t see a new innovative application of the technology in an unexpected setting. The possibilities seem almost endless, and if you don’t get in now, you’re likely to do all your competitors a favor. And faster than you think. In short, time for action!

Lightning fast change
The tempo in which new tech is being developed is going faster and faster. Particularly if we place it in a historical context. Consider that more than 50 years were between the invention of the telephone and the point where half of America had their own phone connection. Or that 38 years sat between the invention of the radio and the point where 50 million listeners were reached. A business like Facebook collected 6 million users in its first year. And that number grew 100 fold in the 5 years that followed.

McKinsey recently considered the impact of IoT on the global economy. They analyzed 150 situations and came to the conclusion that the potential impact was likely to be between $4 and $11 billion per year in 2025. Within this, they see the greatest impact in industry. Think along the lines of operational efficiency and predictive maintenance.


TNO have also told us that in the future, more than 50 billion machines will be connected with each other. This is further supported by the analyses from IBM showing an exponential growth in the number of ‘things’ bound by the IoT.

What is the Internet of Things (IoT)?
The IoT is described by Wikipedia as “the network of physical objects—devices, vehicles, buildings and other items—embedded with electronics, software, sensors, and network connectivity that enables these objects to collect and exchange data”.

In terms of everyday devices, think about your home thermostat controlled by a smartphone app. Or in industry a pumping station equipped with sensors measuring internal and local conditions together with usage. Via an IP address it’s possible to access and monitor the sensors. The information that’s collected can then be saved in a cloud database and presented for further analysis and response planning. The key added-value of IoT is not only the ability to collect this rich information, but the ability to review it to create intelligence that can then be shared (ideally automatically) with other devices. By way of an example, I can set my Hue lighting to flash each time the European Space Station passes over my house. The position of the ISS is shared via IFTTT with the Hue lighting system, enabling it to react automatically to the signals being provided.

Nice applications, but the pressing question is how we’re going to leverage this technology to strengthen our businesses and the economy in general. Because simply by connecting devices, chances are going to appear for companies to drive new efficiency improvements and create new business models.

The future is now
The technology required to enable IoT is often not ‘new’ per se. Given that fact, much of it is becoming increasingly affordable and thus applicable. Think about cloud, data analytics, affordable sensors and more.

An example in the news recently was the LoRa-netwerk (Long Range Low Power) being rolled out by KPN in the Netherlands. For 200 euro there is already a gateway available enabling you to connect up to 20,000 devices with the internet within a range of 5 km.

Or take the Raspberry Pi 2, able to connect to simple sensors and available now for less than 40 euro. As such, it’s perhaps not surprising that the camera is the Pi’s most sold sensor. In sum, the low prices for hard and software relevant to IoT are bringing the concept increasingly within range of ‘normal’ businesses.

The Internet of Cows
One example of a fascinating application is in the dairy industry. Traditionally, this sector collects a large amount of data on the condition of the cattle. This was traditionally managed offline – either on paper, or by scanning the cows’ ear tags.
Anno 2016 it’s possible to use sensors connected to the cloud to measure, collect and analyze all kinds of information about the physical condition of individual cows. Think about milk production, location (where is the cow?), body temperature, movement etc.

This enables the farmer to provide each cow with exactly the care that they need. This improves both the productivity, the welfare and the generated turnover of the herd. It also helps to reduce costs associated with missing problems or treating those that aren’t actually there, and has a positive impact on the farms environmental footprint.

More efficient, more effective processes
Back to the shop floor. In industry, it’s become possible to couple the flow of goods 1:1 with the flow of information. The information stream, the physical product and the machinery involved become one.

In a manufacturing process, all kinds of status changes occur while a product is being produced. Traditionally, information is recorded afterwards, like when it’s noted that a process has been completed, that a follow up process has begun, quality measurements, etc. This separates the  physical flow of goods from the information associated with it.

Applying technology can bind these flows back together. It can make them one. This makes it possible to continually understand where a product sits in a process in real-time, what processes have already been completed, under which quality controls, etc. Registration takes place as the process is happening. Always up to date, with fewer (manual) steps and less chance of things going wrong.

Predictive maintenance
Think, for example, also about suppliers of machinery that strive for 24/7 up-time (like lifts). To achieve that, predictive/preventative maintenance is essential. Sensors and systems can now be coupled to provide rich data on the real-time functioning of the machine. Data visualization and predictive modelling then make it possible to identify what service is needed and when – before it becomes an issue.

Get going and change the game!
The technology that’s already available is giving us the chance to reconsider our business models now. If we don’t do it, the competition probably will. No division of industry is immune to the phenomenon. The impact will be huge, disruptive and is going to touch everyone.

With that in mind, a few tips to get you going with IoT:

1.    ‘Connect’ with your customers and suppliers. Get your customers involved in your process – or better still, do it the other way around. Make your service part of your customer’s process. That’s really putting your focus on your customer!

2.    Offer your customers personalized information to increase your perceived service level. Before long every one of your customers will have their own mainframe computer in their pocket – the smartphone. Use that fact to your advantage.

3.    Decrease your maintenance costs by connecting the products that are located at your customers.

4.    Connect and monitor your products via operators, customers, service engineers; capture the real-time data from your devices and make use of it. Is your customer making optimal use of a product? Could it be better? Be proactive in informing your customer. It will save them time and money and increase your perceived added-value.

5.    Invest in software expertise, regardless of your industry. Take Valk Welding – a big name now in the world of welding automation. The number of software developers in the organization has grown strongly over the last few years – and with a positive result. The degree of automation has created significant differentiation with respect to traditional ways of working, with Valk's customers now hiring them in specifically to make use of their software expertise.

6.    Use the data that’s available. Statisticians tell us that 90% of the data ever created was generated in the last 24 months. And that’s not slowing down. Just 1 % of that data is currently being used. Just think about the chances that might appear if that percentage could be increased by even 1%!

In short - use your data, understand what your business and your customers are trying to tell you, and change the game!