Mohsen Mohseninia is vice president of market development, Europe, at Aeris, the IoT pioneer that is both a technology provider and a cellular network operator delivering comprehensive IoT/M2M services to leading brands around the world. Here, he tells George Malim, the managing editor of IoT Now, that as IoT matures, the need for an ecosystem that links vertical industry experts with providers of secure, reliable, future-proof technology is more apparent than ever. The positive news as we enter 2018 is that proof points for successful IoT deployments now exist and the supplier ecosystem has learned to collaborate with customers and other vendors and enable truly successful partnerships that provide customers with robust, attractive IoT-enabled experiences that are profitable to participants across the value chain.
George Malim: One of the drivers for IoT has been the ability to extract value from the data organizations generate. However, a further step is to become a data-driven organization. How soon could this be a reality and what are the challenges?
Mohsen Mohseninia: All organisations and enterprises are going to be impacted by IoT. Some are going to be impacted in ways that are transformational to how they do business, interact with customers, and conduct product management and product lifecycle management. Some will be impacted in the ways they deliver products as those products become sold as services.
How soon these impacts happen is an interesting question and it all depends on a number of factors, not all of which are clear today. Most organisations have had capex programmes that are not necessarily going to be amortised overnight so investment in IoT will be dependent on investment cycles. For example, a milling machine won’t be changed overnight if the company has just paid a million dollars for it.
The change, therefore, will be evolutional rather than revolutional. Some companies will be IoTenabled sooner, others later but, ultimately, everyone will arrive at this point.
At the moment, what is a clear barrier in terms of growth of IoT within the enterprise, retail and consumer markets is lack of trust. That lack focuses on where does personal data go, who has access to it and what do they do with it The concept of the General Data Protection Regulation (GPDR) in Europe, and similar regulations elsewhere that are addressing the issues, will result in accelerated adoption of IoT, which, in turn, will accelerate organisations to become data driven.
GM: IoT is increasingly recognised as an enabling ecosystem rather than a set of self-contained solutions. How do you see that ecosystem being delivered?
MM: I think, increasingly, we are seeing the emergence of players that are trying to assemble the ecosystem of solutions to create an end-to-end solution that then can be delivered as a branded product or service to an enterprise or consumer. I think this is what will happen because I don’t think the concept of the ecosystem coming together to serve an individual customer need will work.
Those that end up selecting different parts of the ecosystem [from a range of vendors] will end up building partnerships themselves and that will have an effect on how they enter the market.
GM: Do you expect greater efforts to be made to harmonize systems and technologies in the absence of standardization?
MM: I think standardisation is a necessary evil that will create better interoperation amongst the different components of the IoT world. One of the fears that currently exists among major enterprises is being locked into something. The cost of replacing technologies can be prohibitively high.
The drive for standards and consolidation is a real one. In 2018 and 2019, we’ll see some serious standards start to emerge where you either have to abide by them or have a very strong reason not to do.
MM: A number of things are coming together – it’s not one thing. Some are social, some political, some technical.
We’ve all heard about the millennial generation and what that has is a new culture. This generation has a culture of sharing rather than owning, which prefers buying a service rather than acquiring a product. More and more, we will see a transformation in the business case and business model towards providing a pay-per-use solution.
That’s the social part. The political part is the drive towards sustainability and environmental issues, which will see increased re-usability of technologies and platforms. We’ll see the pay-peruse mode change the mind-set from growing a business by producing more to growing by getting more use out of each product. That will emerge in 2018 and we’ll see accidental relationships become more prevalent. For example, providers of leasing and finance and original equipment manufacturers (OEMs) will form relationships to enable new business models.
GM: As IoT matures and organizations bring larger volume services to market, what attributes should they be looking for from their technology partners?
MM: Scalability is a key attribute that organisations need to look for so they get futureproven technologies that give the assurance the technology is fit for purpose. Being scalable and future proof are the keys because of the likely cost and disruption IoT will cause to an enterprise.
Being future proof and scalable is one aspect. Solutions also must be reliable and have proof points to demonstrate that. A further vital proof point is security. It may seem to be a cliché because everyone talks about it, but you can’t talk enough about it. That focus on security needs to be not only from the perspective of whether an organisation’s IT infrastructure is secure – which is, of course, important – but also it must take in whether the supplier is secure and reliable and whether it is stable enough to still be operating many years from now. Remember, IoT solutions will have operational lives often of more than a decade.
The world is full of companies with great ideas that left their customers in the lurch and the old statement that nobody got fired for choosing IBM has some applicability in IoT. I’d advise organisations to look carefully at the credentials of their suppliers and ensure they take advice to ensure the solutions they choose fit their needs.
GM: How do you see partners playing a role in the servitization of unconnected product businesses? To what extent is vertical-specific knowledge needed from the technology perspective?
MM: If you talk about servitisation, such as payper-use, ecosystem players in finance and manufacture need to come together to create propositions by changing the way that product is sold. To do that, they need to know how to bill, how to rate, how to monitor and recover data in ways that are appropriate to each offering.
As a supplier ourselves, we often struggle where we don’t understand or are unaware of the specific verticals’ processes, challenges and competition. We have great technology that performs many aspects well but some verticals actually need something different. To me, it’s essential that vertical knowledge is applied to the process of technology selection for deployments to deliver the expected results.
GM: Do you think organisations with vertical-specific experience will come to companies like Aeris to partner for IoT technical experience?
MM: We’ve seen attempts from management and business consultancies with deep vertical knowledge of a market trying to find out how to make use of IoT within that vertical. However, in most cases, we’ve seen these consultancy firms just looking to learn technologies from an IoT perspective and sell it themselves because they want a greater share of the pie.
We’ve seen more collaboration and harmonious relationships where a particular partner has a deep relationship within a particular vertical and understands that IoT is of benefit to that vertical and sees that Aeris has the technology. The customer then comes part of the ecosystem and, together, we can solve a problem. I certainly see more of that happening as the IoT market matures.
GM: Do you think the concept of any vendor will provide a comprehensive IoT proposition and, in effect, deliver end-to-end IoT to customers?
MM: One of the many things I like about IoT is the fact that the ecosystem is important. This is because nobody has a complete solution but the method and the way the ecosystem works needs to be shoulder-to-shoulder, side-by-side. It has to be a partnership rather than a supplier and consumer relationship.
There’s no silver bullet to enable anyone to say, I’ve deployed my service or my technology and it works. As much as the technology stack exists today, and broadly it does, a large amount of work still needs to be done. The ability to bring new innovations, new approaches and new processes to the table will continue to be absolutely essential to enable the further maturation of IoT and to ensure it delivers on the promise of scalable, flexible, secure, reliable and, ultimately, profitable new models for businesses of all types.
The excitement of new Internet of Things (IoT) applications hitting the market is starting to be tempered by the recognition that moving from a successful, yet constrained, initial deployment or trial to a full-scale enterprise wide deployment is no easy task. In fact, the risks are substantial and there are numerous ways in which organisations can adopt the wrong strategy.
“The failure of an IoT strategy is really about the failure of the digital strategy of the company,” says Tim Stone, a venture partner director at IoT investor Breed Reply. “The key to success is the link between the business unit and technology. This often comes down to clarity and leadership. In terms of clarity, it’s about how well defined were the objectives and was the organisation joined up to make it succeed.”
“Often corporates take on too much too soon, rather than starting on a focused programme with clear measurements of success. The other problem is leadership,” adds Stone. “Success can depend on how involved in the strategy of the business is the chief technology officer or how committed is the board. Do they see it as a way to develop their business model, or is it just about IT. IoT strategies succeed when companies are committed and clear in what they want to achieve.”
IoT therefore can’t be looked upon as an opportunity to achieve quick wins, although there is strong potential for it to enable those. “There is a huge risk that initial deployments will fail and that’s why businesses should consider IoT a long-term strategy, and not a quick-fire tactic,” says Andrew Till, the vice president for technology partnerships and new solutions at HARMAN Connected Services. “We’ve seen companies fall flat on their faces and replace entire initial deployments simply because they haven’t done their due diligence. This could be down to anything from not thoroughly considering the scaling potential for IoT to underestimating the importance of having a foolproof information security plan in place to thwart any cyber and distributed denial of service (DDoS) attacks.”
Theresa Bui, the director of IoT strategy at Cisco, also sees the need to plan for growth from the outset. “As more companies build their businesses around the delivery of valuable services enabled through IoT, they need an IoT data control platform that is flexible and scalable,” she says. “Businesses should be careful to choose one that can grow with your business to support your expansion into global markets. There are options for IoT platforms that provide the global scale – as well as decades of experience and proven use cases – to help ensure that regardless of your evolving business needs, the platform will be able to evolve and scale with you.”
The old saying that a minute spent planning is worth five in the battle is certainly apt in IoT. “Enterprises should, as they would when executing other business strategies, partake in a discovery phase before actively deploying IoT technologies in order to consider and test the real long-term objectives and potential barriers they might face along the way,” says Till. “The companies that are going to succeed are the ones that can extract strong value from IoT and bring in more functions and departments to understand the wider implications and make the most of the benefits across the entire company. Having access to real-time data is key here. Not only can it improve business performance if deployed effectively, but it could completely transform how a company operates from top-to-bottom by helping to uncover and empower new revenue streams and create more efficient and cost-effective business models.”
Another way in which organisations can manage and contain the risks is to look to servitise the enabling tools and platforms for their own IoT efforts. It’s a neat concept to apply the same model to deploying IoT as the deployment is aiming to enable for the enterprsie. “This is one of the areas where using a consumption-based or as-a- service type model can help to reduce this risk in that companies can add capacity as they grow,” says Chris Meering, the worldwide go-tomarket lead for IoT & Global Connectivity Platform at Hewlett Packard Enterprise (HPE). “IoT is an evolving market and companies need to be able to evolve their IoT solutions to meet changes in the market new capabilities as they become available.”
Jason Kay, the chief commercial officer at IMS Evolve, advocates relying on existing infrastructure as far as possible, citing organisational familiarity as a benefit. “Rather than brand new equipment, harnessing the infrastructure that organisations already have in place is a much surer starting point for building upon and encouraging a noticeable difference,” he says. “It is by considering the core business requirements of a company and then layering IoT over the existing control infrastructure that real gains can be made, while improving the customer offering and opening the door to addressing wider economic and environmental challenges.”
Certainly rushing to deploy new technologies in support of IoT initiatives looks to be a high risk move. “Adopting a proprietary, bespoke or siloed solution increases this risk as it may limit the company’s ability to add new capabilities to address new possibilities as they arise,” adds Meering. “Adopting open standards like oneM2M and a horizontal approach also helps as it avoids vendor lock-in and enables new devices, applications and connectivity options to be added to the same platform and using the same data model, meaning that rather than risking the development of multiple vertical siloes companies are able to adopt a horizontal approach, sharing data across vertical applications and providing a single holistic view of their IoT estate.”
For Kay, a key aspect is to keep investment in proportion to the likely outcome. “The greater the investment the greater the risk that initial deployments will be unable to support future business opportunities, irrespective of their capabilities or capacity to do so,” he says. “By having the business’s core purpose at the heart of deployments, there should be ample scalability, however the likelihood of this being pursued is increased if utilisation of the technology is flexible. Most would agree that IoT is fantastic in principle, but how many are willing to explore its ongoing potential if there’s a huge initial investment attached to it?”
“Deployments that rely on a rip and replace approach could therefore limit the appeal to organisations in the short to medium term,” he says. “For example, replacing every in-store fridge, freezer or food delivery van is unlikely to appeal to a multiple retailer whose core business focus is selling produce, as the cost will far outweigh the immediate benefits.”