Two decades ago we were in the middle of another frothy, technology-hyped revolution—the dot-com era. Mass adoption of the internet promised radical changes in business and our everyday life and a new social and economic utopia. In those halcyon days, stock prices were on a tear, venture capital money flowed like water, and countless startups greedily chased the next pot of gold. Could the most recent technology revolution, the Internet of Things, be another dot-com experience?
Similar to the dot-com revolution, the Internet of Things is the culmination of radical advances in four core technology pillars: 1) Connectivity (dial-up modems of yesteryear vs. mobile data and high-speed broadband today), 2) Data (the browser vs. big data and analytics), 3) Cloud (CompuServe and AOL vs. cloud storage and computing), and 4) Things (PC computers vs. smartphones, sensors, and other machines).
In the dot-com era, technology visionaries and strategists could see that the perfect storm of the disruption in these core technology pillars would herald the dawn of a new revolution in how business was done and society operated. But, no one was really sure of how to get there or where the money would come from.
Some companies immediately embraced the dot-com world, many had false starts, and many others took a long time to jump on or the revolution passed them by completely. The technology vendors and providers faced similar challenges adapting to the dot-com era. For some, the frothy bubble offered huge new markets. However, after selling the initial vision and promise, the sale became much more complicated, and competition started to commoditize products and erode margins.
As with all technology revolutions, the path was not a straight line. We had sock puppets and business models based on the illusive quest for eyeballs, as well as outrageous promises of new businesses and social upheavals. But, in the end, we got there. No one today would argue that the internet has not added immeasurable value to the world and changed our lives forever.
The Internet of Things is similar to where we were 2 decades ago, at the start of the dot-com era. We have the promise of a business and social revolution, and great wealth creation, but no one knows how this will really happen.
During the dot-com era, our rational side didn’t believe many of the outrageous value estimates and promises that were being made, but we intuitively knew that the internet would change the world. The same is true of the IoT. Pushing aside the hype and the promises, we know that the IoT will not only add tremendous value, it will fundamentally change businesses and the economy. We are already witnessing companies capturing significant new benefits from implementing the IoT in their businesses. For example, GE is using data from sensors in its jet engines to do proactive maintenance; Barcelona is becoming a smart city to save costs and improve the quality of life for its citizens; and many utilities are installing smart meters to remove meter-reading costs and better manage local energy usage.
We are still very much in the early days of the IoT revolution. A recent study found that less than 10% of enterprises had deployed IoT initiatives. And, of that small minority, only 56% of those had an IoT strategy. What does that say for the 90% of companies who have yet to implement IoT initiatives?
Similar to the dot-com days, the technology vendors and providers also have yet to figure out how they will make money, nor is it clear who will be the winners in this new technology provider arms race.
Gazing into the past, there are 5 key lessons from the dot-com experience that we should remember when implementing an IoT project:
- Ensure that you have a clear and compelling monetization model and a well-developed business case in place for any IoT initiative.
- Focus on the use case and how the technology supports it, rather than the other way around.
- Redesign the business (processes, organization, and business models) around IoT initiatives to achieve the promised value.
- Recognize that people are a critical component to any successful implementation ensuring that change management is embedded in any IoT program.
- Choose technology providers that focus on open technologies, flexibility, new business models, and financial arrangements. Seek providers that are willing to help their customers identify and realize the potential business benefits through consultative selling and services.