Ironically while thinking about producing a blog on the IoT last night, I watched the movie The Circle, which paints a grim picture of what happens to the human experience when the world is full of sensors and cameras, capturing and exposing every moment of the human experience on social media. Despite its nod to Orwell’s ominous novel, 1984, the film does give a positive glimpse into what’s possible when internet-connected objects collect and exchange data – ultimately to serve the greater good for the population.
Particularly with 5G network rollouts underway, most industry pundits predict that the connected world of sensors and other smart devices that comprise the Internet of Things (IoT) will play a much larger role in our lives in the not too distant future. In fact, tens of billions of devices in industry sectors as diverse as healthcare, consumer goods, entertainment and transportation will soon become connected devices. Perhaps as IHS Markit projects, some 30.7 billion devices will be part of our collective lives by 2020.
All of this impending connectivity has many types of businesses wondering what it will take monetize the IoT and what actions to take now to position at the forefront of this growing market. Many of the companies looking to move into IoT (take consumer goods companies, or device component companies) have never had to think about the onboarding, management and monetization of the end consumer. This has been the job of a retail partner, or third party distributor. IoT changes this world and introduces new complexities, and many changes into tried and true business models.
Change is what’s required for success, but this “change” isn’t as simple as putting new technologies in place – it requires rethinking the very bedrock of the way the we serve today’s digitally connected and mobile consumer.
Positioning for Change
The IoT is expected to change or impact every aspect of work and life in the coming years. TMForum expects that everything that can be monitored will be and that sensors will be so cheap that every home will have a few of them lying around the house in a few years’ time. Industry research firm McKinsey predicts the IoT market will grow into a $4T -$11T industry by 2025.
The growth of the IoT is part of broader, global trends brought about by the rise of digital services – including the convergence of industries and consolidation among major players, particularly in the telecommunications and media industries. If we fast-forward to a time when connected devices are prolific, “things” are exchanging data and that data is applied to enhance the human experience, convergence across 4 key areas will have taken place:
- Network Convergence – Convergence of fixed, mobile and other connectivity technologies to create a solid and reliable core with broad coverage, super speeds and low access costs that will ultimately lead to a better experience.
- Data Convergence – Convergence of data and techniques to collect and mine the massive volumes of data to capture insights, create enhanced experiences, enrich interactive features and make proactive recommendations.
- Service Convergence – creating an ecosystem of connected services that allow ‘N-play’ services all designed to create stickiness, reduce churn and drive higher ARPU.
- Experience Convergence – the culmination of network, data and service convergence to ensure a seamless experience that is available anywhere, anytime, on any device. Seamless experiences include easy and automatic connection for new devices, with simple consumer authentication that allows users to be up and running quickly.
Significant Structural Change in Both Business and IT Ahead
For media and communications companies to thrive in this converged world, their connected services must all be underwritten by a multi-dimensional business model comprised of an increasingly complex web of partners and device ecosystems.
To drive revenue from the IoT requires a back-end infrastructure that can support the labyrinth of B2B2X relationships, provide a simplified way to deliver any IoT business model, and put into place the processes and systems needed to seize revenue opportunities…and do it all extremely fast.
Today, businesses are looking to the cloud as the enabling platform of this connected future – moving IT systems to the cloud in particular can provide a lift in speed, scale and reduced operational cost that it takes to deliver connected services in a customer-centric world.
While the benefits of cloud-based systems are real, there are more changes required – the way we think about services, business structure and IT developer skills that must also change; in particular to usher in the era of microservices.
Why Microservices are the Key to the Connected Future
Microservice architecture, or microservices, is a fundamental change taking place now in the development of software systems. Thanks to its scalability, this architectural method is ideal for supporting a range of platforms and devices including web, mobile, IoT, and wearables, or simply to cover the unknowns of the future such as delivering services to devices yet to be invented.
Today’s consumers expect dynamic yet consistent experiences across a wide range of devices. Businesses that want to thrive in the connected era will need to think in terms of scalable, adaptable, modular, and quickly accessible cloud-based applications, with a microservices approach.
So what does a shift to a microservices-based approach mean for businesses looking to position their brand within the IoT?
It means rethinking, and ultimately changing, services and the underlying support systems that allow offers to be targeted and sold to new and existing customers (whether consumers or enterprises, or a chain of enterprises who contribute to a service), and then monetize and settle the subscriptions to link connected service to actual revenue.
For more, download our whitepaper on A Strategy for Success in the World of Connected Everything.