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.

 

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.

 

OSIsoft Wants Its PI Database to Sit at the Heart of IIoT

— October 21, 2016

AnalyticsAt OSIsoft’s EMEA Users Conference, the company set out a clear vision for its PI database: to remain resolutely an infrastructure provider and build out its significant number of partnerships. However, the majority of time was dedicated to its customers’ experiences delivering value from their operational data in innovative ways.

OSIsoft Wants to Position PI at the Heart of IIoT

The utility industry will recognize PI as the most widely used SCADA historian. Yet, PI’s scope extends well beyond utilities; it has a strong presence in many industries, including oil & gas, power generation, manufacturing, and pharmaceuticals. The conference had strong representation from across its core verticals, achieving a record attendance of 1,200 people—3 times the number that attended just 2 years ago.

This remarkable growth is indicative of the increasing value of operational data. A decade ago, PI was used to store data from operational control systems, and few people outside of this domain would access this data. Today, OSIsoft wants to position its database at the heart of the Industrial Internet of Things (IIoT). With a strong focus on digital transformation and IT/OT convergence, the Users Conference focused on ways OSIsoft, its customers, and its partners are helping customers deliver value by using operational data in new ways. A large part of this drive is to provide access to PI data to more users, but in a controlled and measured manner.

OSIsoft Must Work Hard to Raise PI’s Profile within Its Clients’ Organizations

This can be a challenge in many organizations, where PI is often not known beyond the departments that currently use it. IIoT, Industry 4.0, and big data create a huge growth opportunity for OSIsoft, but it must work hard to win this new business. The hype surrounding IIoT and big data is driven by myriad cloud-based IoT platform providers promoting the use of relational databases or Hadoop. OSIsoft warns against the proliferation of cloud-based data services, as these lead to the creation of yet more data siloes—the enemy of any large-scale data discovery project that integrates data from multiple sources.

Although OSIsoft has demonstrated success with its product, the company has to make itself heard through the noise of the big data hype machine. And while it is a profitable business, its marketing resources are limited. As a result, OSIsoft is using its biggest group of supporters to help emphasize the message that PI is a critical tool in IIoT data analytics. Many of OSIsoft’s users are also cheerleaders for the product. The Users Conference was full of customers discussing how other users can gain more value out of their PI licenses.

OSIsoft’s Partners Will Be Critical to Its Future Success

OSIsoft has another ace up its sleeve: a long list of partners that are also targeting the IIoT space. This list includes some impressive names: Esri, SAP, Qualcomm, SAS, IBM, Honeywell, Microsoft, and Cisco.

These vendors recognize PI’s strength and want to ensure that their products integrate seamlessly with PI. In the world of IoT, everyone wants to be OSIsoft’s friend—which is unsurprising, given OSIsoft is a monopoly in many industries. However, it is not just OSIsoft’s market penetration that makes it an attractive partner.

From its earliest days, OSIsoft has resisted the temptation to expand beyond its core business. It is resolutely an infrastructure business. While it has augmented the core PI database with various tools—notifications of anomalous events, data visualization, and integration tools—these are not applications. This means that OSIsoft has no competing products with anyone keen to connect their devices or integrate their applications. In the past, I have been critical of this approach, but my stance is weakening. As the IIoT world develops, OSIsoft’s agnosticism toward applications makes more and more sense: it can partner with a whole raft of vendors and consolidate its position as a market-leading repository for operational data.

 

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