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HARNESSING THE INTERNET OF THINGS

IN ASSOCIATION WITH:

HOW TO DERIVE BIG BUSINESS BENEFITS FROM THE CONNECTED WORLD

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

What Is the Internet of Things? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Why Now? Making the Business Case for Action . . . . . . . . . . . . . . . . . . . . . . . . . .4

Industrial Internet of Things . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Analytics: Turning Data Into Decision-Making Diamonds. . . . . . . . . . . . . . . . . . .6

The BWhereC Factor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Use Cases: Securing Your Budget. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Developing for the IoT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Getting Started . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

Acknowledgments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16

Contents

Even in its nascent form today, IoT is changing the way we interact with our physical environment and how we learn from it too. Besides bringing us Internet-enabled light bulbs and self-driving cars, the IoT will bring to the physical world the kind of behavioral modeling and analytics that have been embedded in the digital world for years. Businesses are already able to apply lessons from the data they gather from IoT-enabled sensors to their own operations, and early adopters stand to reap rewards from this data approach, using it to guide development of next-generation consumer devices and even open up entirely new market segments.

Market analysts from Gartner1 to McKinsey are predicting there will be somewhere between 20 billion and 30 billion digitally connected devices by 2020, equating to a multi-trillion-dollar economic impact.2 Fueling much of that growth will be data—so much, in fact, that the torrent of data generated by the IoT will make big data look like a trickle in comparison. Cisco has some interesting numbers on this. The company calculated that IoT devices created 134.5 zettabytes of data in 2014 (or 11.2ZB each month)—but by 2019 expects that number to almost quintuple, to 507.5ZB. One zettabyte equals more than a trillion gigabytes. In a helpful comparison, a Cisco infographic3 heralding the “dawn of the Zettabyte era” equated 1ZB to the Great Wall of China when 1MB is the volume of the 11-ounce co!ee on your desk.

The upshot is that there will be billions of devices generating an unimaginably vast amount of data in the near future. And if that data is to be useful in unlocking potential economic impact, then it needs to be mined for patterns and insights through the appropriate analytics. Fortunately, data science has matured to the point where we have the kinds of advanced analytics needed to answer the kinds of questions organizations want to ask of the data. Not just “what has happened?” but “what does this mean?” and “what should we do next?” And we can begin delegating some of that decision making to machines.

Through interviews with industry experts and analysts and examination of real-world use cases, this report explores some of the potential opportunities and challenges inherent within the IoT—with a particular focus on data and analytics, the fuel the IoT runs on—as well as some recommendations for organizations considering the possible impacts on their own industries.

It is worth remembering as you read this paper that the journey with the IoT is just beginning. The Internet itself has been in wide-spread use (beyond academia) for around 25 years, and we’re still, as a whole, grappling with the changes it has brought about in business and society; the IoT may take just as long to shake out its growing pains. Regardless, businesses that are slow to plan for the IoT will quickly find themselves le" behind.

“Whether we like it or not, this is the next era of the Internet,” says Erik Ljung, chief technology o!icer for global technology services and outsourcing company Ciklum. “If you don’t have a play in this, you should be worried that you might be disrupted by a smaller player or one of your competitors.”

IF THE ADVENT OF THE INTERNET AND MOBILE COMPUTING WERE MAJOR TECHNOLOGICAL TURNING POINTS, THEN THE INTERNET OF THINGS (IOT) IS CERTAINLY ALSO A TURNING POINT AND AT LEAST EQUALLY AS MAJOR.

2 | HARNESSING THE INTERNET OF THINGS

Introduction

1http://www.gartner.com/newsroom/id/31653172http://www.mckinsey.com/industries/high-tech/our-insights/the-internet-of-things-sizing-up-the-opportunity3httkp://blogs.cisco.com/news/the-dawn-of-the-zettabyte-era-infographic

COPYRIGHT © 2016 FORBES INSIGHTS | 3

Sensors are what make the IoT smart. They sit within physical objects and transmit data about their usage and environment over the Internet, allowing actions to be triggered as a consequence. Two simple examples are wearable technology like fitness trackers, which sense activity and heart rate to help wearers make healthier decisions, and an engine that senses when maintenance is needed before something breaks, automatically scheduling the service.

For businesses, Frank Gillett, Forrester vice president and prin-cipal analyst, explains that IoT answers three questions that were previously either too di!icult or too expensive to answer.

WHAT IS THIS? That is, the unique identity of objects. “The barcode on a can of Coke says it’s a can of Coke. It doesn’t actually tell you that it’s can of Coke number 47 and came from such-and-such a place. Unique identifiers, which IoT enables, let you identify that unique can,” Gillett says. And that becomes

useful to know to contextualize other pieces of information the IoT generates—and besides that, it’s the foundation of security for the IoT.

WHAT IS HAPPENING? Using sensors to record what’s happening in the real world gives insight into things like temperature, humidity, speed, pressure, usage—all sorts of variables that are di!icult to know remotely otherwise. “For the first time,” Gillett says, “you have so"ware status visibility about what’s happening in the real, physical world.”

WHAT NEXT? Using so"ware, you can send action back to the physical world to remotely control an object. “What becomes possible is remote control of a light switch or a piece of machinery or a drone that surveys your crop of corn,” Gillett says. “So what you end up with is this wonderful connection, or integration; this bridge between the physical world and the digital world.”

AT ITS SIMPLEST, THE INTERNET OF THINGS IS A WAY TO CONNECT AND CONTROL PHYSICAL OBJECTS DIGITALLY. PRACTICALLY, IT INCLUDES SENSORS EMBEDDED IN PHYSICAL OBJECTS TO RECORD AND TRANSMIT INFORMATION OVER THE INTERNET.

What Is the Internet of Things?


THE INTERNET OF THINGS IS UNARGUABLY IN ITS EARLY STAGES, HAVING YET TO REACH MATURITY IN TECHNOLOGY, CAPABILITIES AND ADOPTION—MEANING THAT THE “WAIT AND SEE” ROUTE IS AN OPTION MANY BUSINESSES WILL CONTINUE TO TAKE FOR A FEW MORE YEARS.

However, technology market intelligence firm IDC suggests that every business needs an IoT plan now, and that within five years all industries will have rolled out IoT initiatives.4 We tend to agree with respect to businesses that depend on physical assets, meaning, at the very least, the conversations and strategizing for IoT disruption need to begin sooner rather than later.

“If you’re not looking at [IoT] now, you’re missing an opportunity, and you’re also opening yourself up to a pretty serious competitive threat,” says Greg Van den Heuvel, COO of Pitney Bowes So"ware. There are two angles to consider for every organization:

INTERNAL INNOVATION. What are the potential uses for IoT to optimize, di!erentiate and transform operations, processes, and product and service o!erings?

EXTERNAL DISRUPTION. What potential is there for business model disruption from current or future competitors?

There are several other pertinent reasons to begin strategizing around IoT now.

SUPPORT BETTER BUSINESS DECISION MAKING

The data generated by the IoT is a treasure trove of insights for any business. Analyzing this data will not only allow businesses to automate routine decision making—such as scheduling maintenance calls—but will support more complex decision making through prescriptive and predictive analytics (see p. 10).

MARKET PRESSURE TO OPTIMIZE AND DIFFERENTIATE

In a market where price is relatively structured, the pressure is on businesses to eke out larger margins by lowering costs and optimizing business processes on the back end—tasks to which the Industrial IoT is particularly suited. By collecting and analyzing data from equipment and machines, businesses can increase productivity, minimize or eliminate downtime, and better manage uptime.

BECAUSE IT’S POSSIBLE

The algorithms that power the advanced analytics needed to parse the massive quantities of data that the IoT generates have progressed far enough to make revenue-generating use cases possible. Simply put, automation and delegated decision making are possible, where before they weren’t.

Why Now? Making the Business Case for Action

4http://www.idc.com/infographics/IoT/ATTACHMENTS/IoT.pdf


Performance can be monitored on a singular basis or against benchmarks of high-performing facilities of a similar nature around the world. Any asset can be made intelligent with the

addition of a sensor, and that is driving what GE estimates will soon be an Industrial IoT market worth $225 billion.5

A SUBSET OF THE IOT, THE INDUSTRIAL IOT CONNECTS THE MACHINERY AND INFRASTRUCTURE OF INDUSTRY WITH THE SMART CAPABILITIES OF SENSORS AND ANALYTICS, ALLOWING BUSINESSES TO MONITOR THE OPERATION OF EVERYTHING FROM MAIL SORTING MACHINES AND FORKLIFTS TO WIND TURBINES, JET ENGINES AND OIL RIGS, AND TRIGGER ACTIONS ACCORDINGLY.

5http://www.nytimes.com/2016/08/28/technology/ge-the-124-year-old-so"ware-start-up.html?_r=0

Industrial Internet of Things

TWO KEY BENEFITS OF THE INDUSTRIAL IOT WILL BE:

1 MINIMIZING DOWNTIME: Every minute of machinery downtime in the supply chain costs businesses money. IoT sensors transmit data about the status of a particular asset that can be used to predict and schedule maintenance before expensive breakdowns occur. And if there is a fleet of IoT-enhanced machinery, analytics can support further decisions on how to optimize operations overall.

2 OPTIMIZING UPTIME: IoT allows dynamically planned schedules to make the most of capacity, job size, operator availability, fleet size and location, with the aim of increasing productivity and revenue.

If volume, velocity, variety and veracity are the elements of big data today, businesses can only expect each of those to increase exponentially with the IoT. That’s a deluge that is very likely to be overwhelming and underutilized without the right analytics.

There are three kinds of analytics that power the IoT, each representing a progression in the kinds of insights businesses can derive and the actions they can take or delegate as a result.

DESCRIPTIVE: Primarily answers questions of “what has happened?” by looking at past and present performance.

PREDICTIVE: Forecasts what might happen, helping users anticipate likely scenarios to plan accordingly.

PRESCRIPTIVE: Presents a range of suggested actions.

Another key challenge for businesses will be combining the mass quantities of structured and unstructured data, that is, organized versus free-form data such as video or social media data. The ability to analyze both types—and derive context from them—will increasingly be a requirement of analytics in the IoT age. In short, the IoT will make the data itself far less important than the context it reveals.

“In order to get value from the data that comes from IoT,

you have to have analytics somewhere.”

— Frank Gillett VP and Principal Analyst, Forrester


Many, if not all, enterprises already apply analytics to data they own and generate, but the IoT will allow—and require—that strategy to be extended.

Forrester’s Gillett points out the value of data is in how we interpret it and then the action we take because of that. Think of a person who buys a fitness tracker to help lose weight. The tracker records and transmits the data about that person’s heart rate, activity levels and the route, pace and distance

of the morning run—but on its own, that data doesn’t help the wearer lose weight. When the data is presented in a way that the user understands, he or she can take action because of it—a longer run, a faster pace, biking to work instead of driving—that ultimately helps achieve weight loss goals. It’s the same in business, but with many more sources of data and far more complex analytics.

ANALYTICS TURNS THE RAW DATA GENERATED BY SENSORS INTO DIGESTIBLE, COMPREHENSIBLE INFORMATION FROM WHICH ACTION CAN BE TAKEN.

Analytics: Turning Data Into Decision-Making Diamonds

“You cannot do the Internet of Things or the Industrial Internet

of Things without real-time location awareness. It’s not possible.

That’s the missing piece that will catalyze growth.”

— Greg Van den Heuvel Chief Operating O!icer, Pitney Bowes So"ware

However, it’s not just where an object is, but what’s around it that o"en also matters. Rick Ryan, a Pitney Bowes researcher in the Strategic Technology and Innovations Group, illustrates this idea with the example of a city turning tra!ic lights green to ease the path of an emergency vehicle. “It’s not just looking at the route it’s going to take, it’s also what’s around that route,” he says. “What points of interest are there that may be gathering crowds? How do you deal with pedestrian tra!ic? How do you deal with the side streets and things like that? Because you can make the route for that fire truck all green and

create a condition that actually blocks the route.” Su!iciently advanced location analytics take this sort of proximity analysis into account.

Location is also increasingly important for consumer IoT- enabled products and services, as well as for marketing tools, such as ad-tech providers who aggregate shopper location and behavior to target specific and relevant advertising via mobile ad networks. Fortunately, so"ware developers can use pre-existing APIs to add location awareness to their applications.


Imagine having analytics alert you to a problem with a piece of equipment, but not where the equipment is. Without under-standing the location context, where a given physical object is,

the power of the Internet of Things will remain only partially realized.

LOCATION IS INTRINSICALLY ATTACHED TO EVERY OBJECT IN THE PHYSICAL WORLD, AND CONSEQUENTLY IT’S AN INCREDIBLY IMPORTANT PIECE OF INFORMATION TO CONTEXTUALIZE OBJECTS THAT MAKE UP THE INTERNET OF THINGS.

6The Forrester Wave: Geospatial Analytics Tools And Platforms, Q3 2016

The AWhereB Factor

MARKET LEADERSHIPAs a sign of the rising importance of location intelligence to the market, technology researchers and

analysts at Forrester released The Forrester Wave™: Geospatial Analytics Tools And Platforms, Q3 2016,

which evaluated the sector’s top technology vendors and establishes Pitney Bowes as a leader in the

space. As the Wave notes, the IoT “presents a massive opportunity for companies to uncover insights

from spatial relationships, as every connected device can be located by some means.”6

INTERVIEW WITH FRANK GILLETT— VP & PRINCIPAL ANALYST AT FORRESTER


FRANK GILLETT WORKS WITH CIOS AND TECH INDUSTRY INSIDERS TO PREDICT THE DISRUPTION AND IMPACT OF

THE INTERNET OF THINGS AND ASSOCIATED EMERGING TECHNOLOGIES. HE SPOKE WITH US ABOUT THE INHERENT

OPPORTUNITY OF THE IOT FOR BUSINESSES AND THE IMPORTANCE OF ANALYTICS TO POWERING IT. THE

FOLLOWING CONVERSATION HAS BEEN EDITED FOR CLARITY AND LENGTH.

How would you describe the potential in the IoT for businesses to derive value from it?

When we think about the business value for companies, we think of it as three levels of value.

1 Improve Operations

The first level of that business value is the ability to improve your operations. If you’re talking about running a piece

of mail-sorting equipment or a massive industrial printer, it’s simply to instrument and monitor the functioning of

that equipment to improve its e!iciency and performance. Make it more predictable, make it lower cost, increase its

utilization— keep it busier and earning more money.

2 Di!erentiate Customer Experience

The second level of value, once you get past optimization, you can actually begin to think about how to use the

information to di!erentiate your o!ering. You can create advantage or di!erentiation for your product or your

experience by taking care of your customers better. Incremental improvement.

3 Innovate

The third level is what I like to think of as transforming the customer experience or the business model. That’s where

you might, say, gather information from all your customers and begin to feed back to them and say, “Hey, we can

actually tell you not only how you compare with others, but how to think about and rethink what you do or what your

value proposition is.”

Can you talk to us about the importance of analytics and how they will power the Internet of Things for business? O"en what people do with IoT is they get mesmerized by “oh, the gadget’s connected to the Internet.” They fail to [realize]

no value is created by connecting the device to the Internet. The value gets created when the data flows into the so"ware

world, and then you analyze that data and gain insights from it, and then take action to change your behavior based on

that information. In order to get value from the data that comes from IoT, you have to have analytics somewhere.

How does location fit into the picture? Location, whether it’s conceptual location or actual geographic location, is o"en important context for getting value or

improving the value of IoT data.

Interview With Frank Gillett—VP & PRINCIPAL ANALYST AT FORRESTER


Security and Privacy

Any serious discussion of the IoT also

needs to address the dual concerns of

security and privacy when it comes to

the mass quantities of data, much of

it personal, that organizations will be

gathering and controlling, as well as

the real risk that the control of physical

objects will be compromised and acces-

sible to hackers.

These concerns fall into three broad categories.

DATA PRIVACY: As organizations today have

found, consumers can be encouraged to share

their data but under certain conditions: that

the data is appropriately anonymized; that it

is securely stored; and that there is an appro-

priate value exchange in return for the data. As

IoT adoption accelerates, these conditions will

continue to be of importance.

DATA SECURITY: The onus is on the orga-

nizations collecting data to ensure that it is

securely stored and protected from external

threats, and that internal access is controlled

appropriately.

OBJECT SECURITY: Any object connected to

the Internet becomes hackable. If control of

major IoT-enabled infrastructure or industrial

equipment is hacked, the potential for damage

could be catastrophic. Internet users saw

a version of this threat demonstrated in

October 2016, when major websites were taken

o!line by a distributed denial of service (DDoS)

attack that targeted Dyn, a key part of the U.S.

Internet routing infrastructure. Early analysis

at Dyn pinned the blame, at least in part, on the

Mirai botnet, which compromises unsecured

IoT devices—such as cameras and DVRs—

to swarm providers with fake tra!ic to take

them o!line.

In local government, the idea of “smart cities” has already sparked interest across the globe and attracted support and investment from the White House and European Commission, among others. Retailers, healthcare and marketers shouldn’t be far behind in realizing the size and scale of opportunity.

In the short term, organizations will be looking to the IoT to find ways to improve margins through operations. That’s where we’ll see the Industrial IoT shine and businesses hone e!icien-cies from the data they gather about their own operations. Although there will be cases of di!erentiation and disruption from the get-go, as we’re seeing begin to happen in consumer devices, it’ll be the mid- to long-term timeframe before we see such transformation on a broader scale. “People o"en fail to think ahead on the Internet of Things. They design—whether they’re in operations or on the product side—they design for that first level of optimization because that is what strikes them as obvious, and because it’s always easier to justify the ROI and get budget for things that save money,” says Forrester’s Gillett.

“What I advise clients to do is brainstorm and think ahead to the potential for di!erentiation and transformation. Bake the experiment into the extra cost up front, where you can o!set it with the cost savings that are the most obvious initial benefit.”

The following list of use cases is by no means comprehensive, but it should start to give some idea of the range and depth of business cases to be made for IoT investment.

SMART BUILDINGS

Smart buildings use integrated IoT technology to intelligently control environment and energy usage. A basic application might be sensing people entering a room and turning up the air conditioning cooler to compensate, then setting it warmer again when people leave. Beyond that, the data generated by the building can be used to refine its energy usage, reduce carbon footprints and increase the comfort (and thereby, productivity) of its occupants.

CONNECTED CARS

Using sensors to communicate everything from engine health to geo-positioning and accident detection, vehicles present a huge opportunity for IoT technology. Cars will be able to self-diagnose issues and even schedule appointments for servicing with dealerships. Automakers who aggregate the data across all vehicles will be able to catch design faults earlier, manage recalls more smoothly and use actual performance data to design better cars that better meet the needs of drivers.

INSURANCE

Insurers may see market opportunity by o!ering di!erential or dynamic pricing models to customers agreeing to share data from their connected devices with insurers. Perhaps house-holds with IoT-enabled security systems will qualify for lower rates, or individuals that meet their 10,000 steps per day target get a break on their health insurance.

SUPPLY CHAIN AND LOGISTICS

Supply-chain management and logistics are ripe for IoT innovation. Not only can they expect to see enhancements from predictive maintenance and self-diagnosis, they will experience benefits from increased visibility into location and inventory.

THE POTENTIAL APPLICATIONS AND BENEFITS OF THE IOT SPAN ALL INDUSTRIES, BUT ADOPTION WILL LIKELY BE UNEVEN ACROSS THEM. MANUFACTURING, LOGISTICS AND INSURANCE SHOULD FIND A LOT OF EARLY OPPORTUNITY FOR INNOVATION, AS WELL AS ORGANIZATIONS DEALING WITH UTILITIES AND INFRASTRUCTURE.


Use Cases: Securing Your Budget

VISIBILITY: Proximity and location sensors allow shipments to be tracked and monitored in real time along the entire route. Other sensors might indicate the health or status of a shipment throughout, including temperature and humidity—which might be critical for certain kinds of freight, including live animals, organs, chemicals or other valuables.

INVENTORY CONTROL: Inventory is automatically monitored and restocked when levels are low, or parts are automatically moved to the production floor when needed, reducing downtime and the need for manual oversight.


The Ciklum team’s winning solution was a smart automatic external defibrillator (AED) that instantly notifies first responders in the event of deployment, providing them with vital health and location data and the means to communicate directly with helpers on the scene. The platform was built using Current by GE, Cisco Spark for communication and Pitney Bowes APIs for geolocation and the public safety answering points (PSAPs) where 911 calls are routed. Erik Ljung, Ciklum’s chief technology o!icer, spoke with us about developing with a top-down approach for the Internet of Things. The following conversation has been edited for clarity and length.

Ciklum’s smart AED relied upon several APIs, including ones for geolocation. How important is it as developers to be able to integrate specific APIs into your solutions and not have to retain that expertise internally? That’s really the future of IoT development. It’s going to be an integration play. The development and emerging IoT technology stack is moving so quickly. It’s so rapid. There are more than 200 IoT platforms, and thousands and thousands of cloud APIs. So the key to being an IoT developer is being able to pick the right [APIs] and then also being able to integrate them in an e!icient way. [Now] you have a physical touchpoint that has hardware elements, it might have an industrial design element, connectivity, sensors, big data, a web presence, the cloud. At the end of the day you can’t build it all. It’s not going to be justified, so you have to look at what is out there and what is enabled by APIs.

IoT is still an emerging technology, but where do you see the opportunities for early adopters? I would urge every CEO and CTO to start thinking and learning about IoT and looking into how physical touchpoints can create new use cases and revenue streams. If you collect a lot of data to analyze, that’s one way of getting a return on investment. It’s important to realize that the data you’re collecting is suddenly becoming an asset as well. Let’s take the AED, for example, again. We’re building out a use case, but if we have X amount of these AEDs out there, a"er half a year we have a bunch of data that could, for example, be sold for research in heart disease. You see that it can open new opportunities you didn’t even think about.

IN MAY 2016, GLOBAL TECHNOLOGY SERVICES AND OUTSOURCING COMPANY CIKLUM WON THE IOT FOR CITIES

HACKATHON IN SANTA CLARA, CALIFORNIA—FOR THE SECOND CONSECUTIVE YEAR.

Developing for the IoT

MOBILOZOPHY RAMPS UP SHOPPER MARKETING WITH BEACONS

Mobilozophy is a mobile marketing company based in Tampa, Florida, that uses analytics

on data gathered from beacons within retail premises to understand shopper behavior and,

in response, tailor marketing o!ers through loyalty apps on the customer’s phone. Paul Wray,

the firm’s co-founder and managing member, suggests that the solution, which places the

Bluetooth-enabled beacons in a grid throughout the store rather than simply at entry or exit

points, brings the behavioral tracking you’d expect on a digital platform like Amazon to the

physical world. By dividing the store into 1-meter grids, shopper behavior and travel within

the premises can be tracked and understood to influence consumers at the point of purchase,

increase basket spend and encourage add-on purchases.

As an IoT solution, the so"ware decides what o!ers to display to shoppers based on their path

through the store, aggregating that route data and sending it back to the store’s servers. That

data could in turn be used to refine store layout and determine premium placement for vendors.


What advice do you have for businesses that are already using big data and business intelligence as to how to embed that data and analytics into an Internet of Things approach?As a business, I would look at what the existing pain points are and where I can improve or grow—using data and analytics is just one component of it. IoT can be a framework for more data and more analytics, and it’s bidirectional. Once you have data and analytics, can you automatically push it back out when you have the touchpoints in the physical world? [And] once you have those touchpoints, you can change things. Take the AED use case; this was very much bidirectional. Data was being sent to the first responders, but there were also commands coming back to the person actually using the AED. And these are things that, if you’re a business trying to understand what IoT is and how it can impact your business, answer questions like: Is there a higher ROI that can be earned by having physical touchpoints? Are there any potential disruptions that I can do in my space or my business by having physical touchpoints? And are there use cases that would matter, like savings lives [with the AED], that are worth investing in?


As you begin those conversations internally, consider the following recommendations:

LOOK TO THE LEADERS

Be aware of how your competitors and industry leaders are using IoT in their consumer-facing o!erings and for di!erentiation, as well as for internal optimization. Be aware of changing business models and consumer expectations around IoT. Partner with IoT technology leaders.

MAKE IOT A BOARD-LEVEL AGENDA ITEM

Senior leadership should be taking the long view to understand how the threats and opportunities of the IoT impact their industry and business. Think ahead to potential di!erentiation and transformation opportunities (see Frank Gillett interview, p. 8), and don’t stop with the immediate business case for cost savings. “Think strategically as you start, and try to anticipate and build in experiments or extra value so that you aren’t faced with a more di!icult ROI or cost justification downstream for these more experimental or upside benefits that will come through,” says Gillett.

CENTRALIZE ANALYTICS

Harnessing the IoT is going to require a level of data and analytics literacy that many organizations lack today, especially with the integration that will be necessary between structured and unstructured data. Kristin Rahn, Pitney Bowes’ product manager for predictive analytics, says businesses need to become, to an extent, analytics- driven. “They need to learn how to ask for analytics and how to take what the analytics shows them and act on it,” she says. “That’s just going to be more and more imperative as the Internet of Things starts to grow.” Now is the time to lay the foundations so that decisions can be made faster and more easily down the road.

TAKE A TOP-DOWN APPROACH

The IoT ecosystem is already huge and fragmented, lacking clear common standards at this point in the game. Ciklum’s Ljung estimates there are more than 200 IoT platforms already—so he recommends starting with the problem that needs to be solved and “filling the gaps” with the right technology from there. “If you start from the bottom up…you get lost pretty quickly,” he says. “But a lot of the puzzle pieces you probably need for your solution are out there. So the skill is really about putting them together in an e!icient way.”

ALTHOUGH IOT TECHNOLOGY IS STILL RELATIVELY NEW, ORGANIZATIONS NONETHELESS NEED TO START STRATEGIZING NOW FOR HOW IT WILL IMPACT THEIR INDUSTRIES.

Getting Started


ANTICIPATE SECURITY

Anticipate security and privacy concerns, and center those in the architecture development right from the start. Cleansed and de-duplicated data plays a vital role in this process, laying foundations that allow for real-time detection of security breaches and fraudulent activities.

THINK INCREMENTALLY, EXPECT CHANGE

There’s still a lot of uncertainty about the specifics of the IoT; there’s no common platform for devices to communicate (although GE’s Predix is an early contender for industrial applications) and no universal standards for security or other elements at this stage. So a pragmatic approach that doesn’t lock the organization into a particular path is needed. Early adopters should experiment, but expect change and allow for the risk of placing a few wrong bets. “You’re trying to find specific use cases where there’s a solid business case now, but you’re doing it with the clear-eyed expectation that this stu!’s going to change and evolve, and you shouldn’t be making some giant, complex commitment,” Gillett says. “You should be experimenting with the expectation that things will change.”

CONCLUSION

The Internet of Things is a source of huge potential for businesses that move to capitalize upon it. That potential will be manifested in several ways: in busi-nesses optimizing their own operations, in creating consumer-facing products and in the eventual mon-etization and learning from the data these generate. And, thanks to a burgeoning IoT ecosystem of platforms, developer tools and APIs, there’s no need to go it alone. Expertise can be plugged in, rather than developed internally, allowing many product development steps to be leapfrogged. But businesses should approach the available tools with a discerning eye and partner wisely with those that have the strengths and analytics robust-ness that will serve them into the future. It is imperative for businesses to factor the IoT into the near term, particularly for those with physical assets and equip-ment. To paraphrase Ciklum’s Erik Ljung, the IoT is the next era of the Internet whether we like it or not—so plan for it, or plan to be disrupted by it.

For more information about Pitney Bowes, the Cra!smen of Commerce,

visit: www.pitneybowes.com.


Forbes Insights and Pitney Bowes would like to thank the following individuals for their time and expertise:

Marie-Pierre Belanger, VP Digital Solutions & Product Manager, Pitney Bowes

Frank Gillett, VP and Principal Analyst, Forrester

Gerhard Heide, Director Global Market Strategy, Pitney Bowes

Ajay Kumar, Director Machine Learning, Data, Design, Geocoding, Pitney Bowes

Erik Ljung, Chief Technology O!icer, Ciklum

Kristin Rahn, Product Manager, Predictive Analytics, Pitney Bowes

Rick Ryan, Senior Fellow Strategic Technology and Innovations, Pitney Bowes

Greg Van den Heuvel, Chief Operating O!icer, Pitney Bowes So"ware

Paul Wray, Managing Member, Mobilozophy

Acknowledgments

ABOUT FORBES INSIGHTSForbes Insights is the strategic research and thought leadership practice of Forbes Media, a global media, branding and technology company whose combined platforms reach nearly 75 million business decision makers worldwide on a monthly basis. By leveraging proprietary databases of senior-level executives in the Forbes community, Forbes Insights conducts research on a wide range of topics to position brands as thought leaders and drive stake-holder engagement. Research findings are delivered through a variety of digital, print and live executions, and amplified across Forbes’ social and media platforms.

FORBES INSIGHTS

Bruce RogersChief Insights O!icer

Erika MaguireDirector of Programs

Andrea Nishi, Project Manager

EDITORIAL

Kasia Wandycz Moreno, Director & Report Author Hugo S. Moreno, DirectorDianne Athey, DesignerPeter Goldman, Designer

RESEARCH

Ross Gagnon, DirectorKimberly Kurata, Senior AnalystSara Chin, Research Analyst

SALES

North AmericaBrian McLeod, Commercial [email protected] Muszala, ManagerWilliam Thompson, Manager

EMEA

Tibor Fuchsel, Manager

APAC

Serene Lee, Executive Director

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