Is the IoT hype finally over and what does scale have to do with it?

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Many companies have adopted IoT on a large scale and are well beyond the initial piloting and prototyping stages.

IoT has been a major buzzword on the tech scene for some time now, but is the hype finally over?

The answer to this question may lie in another question. Are companies scaling their IoT solutions and can they achieve impactful ROI? Probably, yes. Many companies are actually adopting IoT on a large scale and are well beyond the initial piloting and prototyping stages.

Broadly speaking, IoT can affect both the bottom and top lines of an enterprise, hence IoT applications can be loosely grouped into bottom-line and top-line applications.

Bottom-line applications allow companies to boost operational efficiency and cut costs across the enterprise. Such applications include digital factory, fleet management, predictive maintenance, and connected workforce solutions. The potential benefits include less unplanned downtime, improved fleet efficiency, and increased workforce safety.

Large-scale deployments of such bottom-line IoT applications are gaining ground across different sectors, but most can be found in asset-heavy and supply-chain-oriented industries such as manufacturing and retail.

The UK retail sector paints a positive picture of such adoption. For example, Tesco and Morrisons have equipped their truck fleets with telematics solutions to improve efficiency while Lidl has deployed IoT across its fleet to remotely monitor cargo temperature and obtain valuable insights into the condition of the cargo. A few years ago, Sainsbury’s announced plans to connect more than 250,000 luminaires across 250 of its superstores in an effort to cut energy costs.

However, deploying top-line IoT solutions to innovate, develop, or improve products, services, and business models on a large scale can be somewhat more complex because to do so it is first necessary to unlock an ecosystem of partners. Finding the right ones, and designing a business model and services around them may be challenging for some organizations.

Despite the potential complexity, there are good examples of such innovation at scale across industries. Airbus, for example, uses IoT to improve operational efficiency and develop new services. To boost its top line, Airbus launched its Skywise predictive maintenance platform to provide predictive insights about jet engine operations. By processing jet engine data, the platform provides airlines with actionable insights to improve maintenance processes and cut costs. Given that the fiercely competitive airline sector is currently facing major headwinds, the appetite for cost-cutting enablers among airlines is growing fast.

Launching a platform enabled Airbus to move up the value chain and become a tech player rather than just an OEM while also providing a valuable service to the airlines. The efforts appear to have paid off, with 60 airlines already signed up to the platform. EasyJet was among those that went all in and deployed the platform across its entire fleet.

Airbus has maintained this momentum by scaling the capability of its Skywise platform and extending it to connect assets beyond engines. This feature will enable the Connected Cabin experience and essentially provide the cabin crew with real-time insights into the operations of assets including lavatories, seats, and overhead compartments – all of which can be connected to the platform.

However, the key success factor is getting the ecosystems of partners right and it seems that Airbus is moving in the right direction. For example, the company is forging closer relationships with OEMs that specialize in airplane equipment. One such company, global seat manufacturer Recaro, is working with Airbus on the connected cabin experience and aims to connect its seats with IoT and provide advance alerts when maintenance is needed.

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Two companies showcased iSeat, part of the Connected Cabin concept, which connects economy seats to the platform and informs cabin crew whether seats are in the upright position during take-off or, for example, whether a life jacket is missing. By connecting more OEMs’ products to its platform, Airbus could increase the value it brings to airlines, a move that should pay off in the future.

However, getting the ecosystem play right may be a challenge as companies often lack a clear strategy with appropriate business models, resources and awareness about the potential partners.

Thus, to move from proof of concept to a large-scale industrialized partnership ecosystem, companies need to have a clear strategy, business model in place, appropriate platforms and technology, and should start testing the water sooner rather than later.

To learn more about how IoT can be used to drive operational efficiency and develop new connected products, services, and business models, connect with me.

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