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Defining the IoT Ecosystem for Enterprises

The Internet of Things (IoT) is a rapidly growing phenomenon. This network of connected devices – 27 billion by 2024, according to Machina Research – will soon affect every aspect of how organizations operate. To streamline operations and gain an advantage over competitors, enterprises should incorporate all aspects of the emerging IoT ecosystem in a horizontal management platform.

Layers of the IoT

The umbrella term IoT encompasses several components: devices, networks, platforms, and applications or other tools that enable data analytics. Devices or modules represent the visible outer atmosphere of the IoT, and can include internet-connected vehicles, health care equipment, building monitors, and security systems. Each device generates data, transferring it to a connectivity network. In the network layer, a platform is needed to process the data and enable communication to remote users. Also known as middleware, the platform acts as a point of connection between device hardware and application software. Applications help users process information generated by the devices – for example, an IoT security system might permit the user to access video footage and other data with a smartphone app – allowing for analytics and application.

Endless Opportunities for Enterprises

The development of this technology presents a host of IoT opportunities for enterprises in a range of sectors. Smart thermostats and lighting can be linked to motion sensors, allowing automatic energy savings for companies with large buildings. Connected video cameras allow smart cities to better control the flow of traffic on roadways, and IoT-enabled cars can successfully navigate streets without the aid of drivers.

Opportunities for monetization at the application level abound, but only when the foundational network and platform layers are compatible. Sixty-eight percent of the IoT’s value share lies at the application/analytics level, but without the support of a secure network and standard platform, prospects for new growth are limited.

When companies incorporate all aspects of the IoT ecosystem – managing devices, platforms, and analytics – they create a rich, constant source of information that can be mined for decision-driving data. Because the IoT is still in its infancy, many devices lack a common platform for communicating the collected data. That’s why creating a horizontal platform plays a crucial role in streamlining the IoT’s success.

A Horizontal Approach

So far, a vertical business model has dominated most IoT systems and devices. In the vertical model, a single company controls the IoT device, gateway, application and cloud-based service. The company has complete control of decision-making at every level, presenting one clear advantage of this model. Users deal with a single provider if there are technical difficulties, rather than having to track the problem to a particular company among several.

But the drawbacks of the vertical approach outweigh its benefits, especially from the user perspective. For example, one company might offer an IoT system to remotely control electric light usage in a building, while another company markets an IoT motion sensor linked to the security system. In the vertical model, each system has its own distinct platform, making it impossible to control the two devices from a single remote application.

To streamline user control of IoT devices, the horizontal platform makes more sense. In the horizontal model, a single, open-source platform allows a variety of companies to develop IoT devices and apps that are compatible with each other and able to interact inside a common framework. For example, a building manager could monitor and control security cameras, lighting, and thermostats from a single app.

For enterprises, a horizontal approach to IoT systems is clearly the advantageous choice, offering ease of use and opening the door for future device and app development. Since everything operates on the same platform, a horizontal model also enables companies to more easily secure their IoT value chain. The simplified system reduces costs and increases opportunities for data monetization by allowing for more flexible, mix-and-match growth across IoT sectors.


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Case Study: IoT is redefining the customer experience. Nokia case study.

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