Navigant Research Blog

IoT Gains Ground among Corporate Executives

— September 28, 2017

Recent studies point to growing acceptance of Internet of Things (IoT) technologies among businesses. These studies provide more evidence that the concept has moved beyond hype and into a gray area of early stage acceptance, experimentation, and uncertainty.

Verizon’s latest report on the topic finds 73% of executive survey respondents are either deploying IoT solutions or researching the technology. The report also highlights compelling economics, citing that among business-to-business applications, there is the possibility to generate nearly 70% of the potential value enabled by IoT technologies.

Another study from enterprise software vendor IFS found that 30% of respondents from industrial companies say they use IoT data to support field service management, while 16% say their firms use IoT data in enterprise resource planning software. While this response did not come from the majority of respondents, the data shows a significant level of early adoption. The study also suggests the effects of IoT are likely to be greater in the industrial sector than among consumer products and services. And I concur; the drive to cut costs, improve operational efficiencies, and seek tangible ROI is more compelling among businesses. Consumers care about such things to be sure, but they seldom act with the same verve as corporations.

SAP had a similar study earlier this year that found 3% of corporate executive respondents saying their companies had completed companywide digital transformation projects, many of which involved IoT technologies. This is still a low level of adoption in view of previous industry expectations. Nonetheless, 55% of the same respondents say their firms are conducting pilot programs, which is a positive sign.

Case Studies Proving Necessary

What is lacking in the marketplace for IoT, or industrial IoT (IIoT), is a persuasive set of case studies that show how a company can move from where it is pre-IoT to a valuable deployment involving the latest tools. Business leaders tend to be skeptical about new technology and want to make sure the benefits are clear before moving ahead, especially with the complexities and new costs involved in IIoT projects. There are examples of companies making strides in this direction. One is Alpiq, a leading Swiss utility, which has adopted an IoT data strategy to transform its operations and now expects to see lower total costs. But more examples across many industrial sectors are needed before one can say the trend has truly taken hold. Until then, we shall be in an uncertain period as many firms test the waters and gradually learn what works best. Once more of the leaders set the stage, others will follow.

 

Smart Dust Has Yet to Settle, but the Hype Flourishes

— September 7, 2017

Smart dust … it sounds like a magical substance sprinkled on dumber things. Which is kind of true. The concept has been making the hype-cycle rounds late this summer and setting off some industry buzz among megatrend watchers during an otherwise lackluster news and information cycle.

But smart dust is not all that new a concept. Not long ago, it might have been known by the more mundane and geeky term micro-electromechanical systems, or MEMS, which is common in the computer chip world. Lump it together with the much hyped artificial intelligence (AI) notion and presto, smart dust gets new life.

Motes Not Dust Mites

So, what is smart dust? It is a swarm of tiny electronic sensors, some evidently smaller than a red blood cell, designed to float in the air and do various things. These tiny devices, known as motes, are self-powered. The idea is to unleash hundreds or thousands of them, have them interconnect wirelessly, and then perform a task or set of tasks. Think of releasing a batch over a farm for testing soil chemistry or pesticide levels.

Smart Dust for Energy Management

This smart dust could also be used in homes or commercial settings to reduce energy use. That was one of the use cases imagined by Kris Pister, a professor at the University of California Berkeley and smart dust pioneer. He has been tinkering with smart dust since at least 2001, when California was in the midst of an energy crisis. Back then, he worked on the technology with colleagues at Berkeley’s Center for Information Technology Research in the Interest of Society (CITRIS) in an effort to find new ways to conserve energy. The idea never quite took off as imagined.

The idea for dust networks goes back further to when the US Defense Advanced Research Projects Agency (DARPA) and RAND Corporation worked on the idea in the early 1990s. One can imagine the use of smart dust over a battlefield, feeding field commanders with relevant data in real-time to get the upper hand on an enemy. The idea can even be traced to novelist Philip Pullman’s His Dark Materials trilogy; dust in the books is a mysterious cosmic particle that is a central plot device.

A Cloud of Potential

Needless to say, smart dust motes have not made much of an impact outside the labs. Nonetheless, given the potential and the many swirling technologies of AI (e.g., deep learning, machine learning, smart robots, and the rest), smart dust’s future could be quite amazing, though that remains on the horizon. For now, one can keep the idea of smart dust on the radar while focusing on the more practical emerging technology trend affecting the grid and other industries, namely the Internet of Things, a topic extensively covered by Navigant Research.

 

US Utility Customers Remain Satisfied, but Always Room for Improvement

— August 3, 2017

Not often are electric utilities painted in a positive light in the public sphere. But the latest survey from J.D. Power suggests many US utilities are doing things right, and it has a 6-year upward trend in residential customer satisfaction scores to back that up.

Where Do the Positives Come From?

Utility managers pay close attention to these J.D. Power surveys, so it is worth noting what the new survey results reveal:

  • Overall satisfaction averages jumped 39 points this year compared to 2016, rising from 680 to 719 points (on a 1,000-point scale).
  • Utilities showed a 48-point increase for price factor, increasing from 611 points in 2016 to 659 points in 2017. Note: price factor satisfaction tends to rise as customers rate their utility higher for ease of understanding pricing, total monthly cost, and pricing fairness.
  • A 7-point increase (66% vs. 59% in 2016) in the number of customers receiving critical information during power outages—such as the cause, number of customers affected, and estimates when power will be restored.

Among the factors driving the improving satisfaction scores in 2017 is the notion that utilities are investing in infrastructure to increase safety and grid reliability (68% of respondents compared with 63% in 2016). DTE Energy is just one of many utilities that have made this kind of an infrastructure investment in recent years that can pay off in terms of customers having a more upbeat impression of their utility.

Another finding from the survey is an increase in electronic bill paying, with 20% of respondents saying this is how they pay their bill compared to 17% in last year’s survey. This trend is welcome news to many utilities (for example, ComEd) that have been encouraging customers to move away from paper bills as a way to lower utility costs for some time.

Alignment of Mobility and Satisfaction

Increasingly, customers access utility websites from mobile devices. More than a third of the respondents (35%) say they visit their utility’s website from a mobile device, which is a 15% increase from 2016. SRP in Arizona is one such utility that has scored highly in satisfaction with its website, ranking number one in a different J.D. Power survey.

Utilities take plenty of abuse from customers when the power is out, the bill is wrong, or a rate increase seems unwarranted. Nonetheless, the 6-year upward satisfaction trend is hard to argue with, and given the increasing pressure to simultaneously modernize the grid and keep bad cyber actors at bay, utilities do a good job overall. Yes, one’s utility can seem large and impersonal at times, but for most of us, these companies and their people deserve credit for keeping the lights on and providing power at reasonable prices. They are not perfect. There is continual room for improvement on many levels and when they mess up, customers should complain and have issues resolved quickly. By and large, though, utilities get the job done.

 

Key Hurdle Stifling Smart Home Adoption Starts to Crumble

— July 11, 2017

New signs for the potential of enhanced harmony and interoperability among smart Internet of things (IoT) devices and platforms have emerged. If true, a key hurdle slowing smart home adoption would begin to crumble.

Alphabet, Apple, and Amazon

At the heart of the interoperability movement are two important market players—Alphabet’s Nest and Apple. Both actions and words indicate a willingness to make it easier for disparate devices to work together. First, Apple recently announced it will no longer require a chip called MFi to be installed in a device for the device to work with Apple’s HomeKit platform. Then, Nest followed up by telling the website 9TO5Mac that it is at least considering support for HomeKit in the wake of Apple’s newly announced iOS 11 features (that makes supporting HomeKit easier) and the fact that Apple is dropping the MFi chip requirement.

Though it is not a done deal between these two tech giants, it looks like interoperability is closer than we expected. This could help unleash a market growth phase, as buyers will not have to choose only devices that work on a single platform, but will be able to more easily mix and match from multiple vendors.

Meanwhile, a competing IoT platform, the Amazon Echo (Alexa), keeps adding important device manufacturers willing to integrate with the leading voice-activated assistant. Bosch and Kenmore have announced some products will work with Alexa. Bosch will soon sell Alexa-enabled major appliances, and a new line of Kenmore Wi-Fi-ready smart air conditioners will work with Alexa, as well.

The Future of Interoperability

The need for enhanced interoperability has been a constant theme in Navigant Research’s IoT market reports, including the one titled Market Data: IoT Devices for Energy Management, which noted the issue. These interoperability steps by key market players are encouraging, and stakeholders should take note if they want to reap benefits from a widening market.

Nonetheless, consumers have some ways to go before committing to IoT smart home technology. A recent survey among American respondents shows 85% would prefer products from a single brand, indicating they understand the problems associated with a lack of products from diverse vendors that do not interoperate. The survey, sponsored by the UK brand Hive, also highlighted two other barriers: higher prices for products and the difficulty involved when it comes to installing the latest gear that leads to the potential need for professionals to lend a hand.

As my colleague Paige Leuschner pointed out in a recent blog, the need is evident for interoperability among products from the same vendor. Manufacturers need to keep this notion in mind as people integrate older versions of devices by making the devices backwardly compatible when at all possible.

Despite the market friction, there is reason for optimism given these signs of greater IoT or smart home product interoperability. For several years, I’ve been saying devices and systems need to play nicer together, and the message seems to be sinking in, at least among some product vendors. However, market stakeholders need to pay attention to consumer thinking. The Hive survey tells us many potential buyers are not convinced the technology is ready and affordable for them to adopt—and that’s a problem.

 

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