Surely by now we’ve all heard the news: Internet of Things and Big Data are the future. Gartner predicts 20 billion IoT devices and $3 trillion in IoT endpoint spending by 2020. Big data is expected to generate over $200 billion in spending by 2020 and 180 zettabytes of data by 2025, according to IDC. Whether these numbers are exact is irrelevant. The key point is that they are large…very large.
Predictions for how IoT and big data will impact our lives are equally striking. Business Insider states, “every aspect of our lives will be affected by the increasing ability of consumers, businesses, and governments to connect to and control everything around them. Imagine ‘smart mirrors’ that allow you to digitally try on clothes; assembly line sensors that can detect even the smallest decrease in efficiency and determine when crucial equipment needs to be repaired or replaced; GPS-guided agricultural equipment that can plant, fertilize, and harvest crops; fitness trackers that allow users to transmit data to their doctors.” Every aspect of our daily lives will somehow be influenced by IoT and big data. Every business will be touched, so every business is now trying to figure out how to be a digital company, and if not, perhaps they should be.
"What is occurring today in IoT and big data is an evolution, albeit an accelerating one, of capabilities and ideas that have been around for a long time"
Nevertheless, many businesses face a fundamental challenge: how to monetize the IoT and big data opportunity? Clearly, the explosive growth of the digital titans like Google, Facebook, and Amazon and the impact of network effects are well noted, but what about everyone else? What do they do?
Let’s pause to look back. Imagine machine-to-machine communication in which one machine takes an encoded message and transmits it over a long distance to another machine where the message is decoded.
Not hard, it’s rather common, but this was the year 1844. The message was “What hath God wrought,” sent as a sequence of dots and dashes from Washington to Baltimore by Samuel Morse. Machine-to-machine communication has obviously seen several advancements in data rate and volume, encoding and decoding algorithms, and physical transmission technologies, both wired and wireless. You only need to think about such core advances as the internet, cellular communications, and Wi-Fi, and the performance improvements within each over time. Data storage and computation technologies have similarly developed over many decades. Gordon Moore made his famous prediction in 1965, and Moore’s Law has proven out year over year since. What is occurring today in IoT and big data is an evolution, albeit an accelerating one, of capabilities and ideas that have been around for a long time. In other words, old is new.
Yet the capabilities that exist today obviously enable entirely new categories of applications and opportunities. With smartphones everywhere, over half the world’s population carry computing power in their pockets unheard of only a couple decades ago. Data storage has become so inexpensive that capturing and retaining vast data sets is now practical. Transmission rates are fast enough that information can be delivered instantly. Even though the latest techniques of machine learning, such as neural nets, may trace to origins 50 years or more ago, the combination of current computing power, large scale data storage, and fast transmission results in capabilities that are truly changing the world. Just think about how “normal” it is to ask your phone to find directions to the nearest restaurant for you, and then tell you each turn as you are driving. Continuing advances, such as 5G communications, GPU cloud computing, virtual reality, and low-power sensing, just to name a few, portend even more spectacular applications.
From a somewhat simplistic view, however, economies are driven by people exchanging goods, services, and money for other goods and services that bring improvement to their lives. Improvement may mean anything from basic necessities to purely pleasurable experiences. People and organizations do not buy cool or interesting technology just because it’s there, but rather because of what it provides. And this has remained true, regardless of the latest advancement. In other words, new is old.
This simple truism is the key to effective digital transformation. It is the key for businesses to monetize all the latest and greatest advancements. Do not fear to use the latest and greatest to the full extent of its capability. Yet, through all the hype, noise, and excitement created by IoT, big data, machine-to-machine communication, virtual reality, artificial intelligence, and so on, always remember who you are serving. Spend both significant and quality time with those people and organizations to discover their circumstances and needs. Always remember to understand first and foremost what improvement you bring to the lives of those who buy your offerings—keep your focus on the customer intact.