Over the past year, I’ve written extensively about two topics close to my heart: Internet of Things (IoT) applications and the evolution of the “As A Service” Economy.
In my mind, these two topics are inexorably linked. More accurately, the “business model” bullet in my IoT Requirements framework is predicated on adoption of As-A-Service modes of delivery.
Few believe that IoT will take life as islands of gadgets that exist with the marginal benefit of network connectivity to “phone home” for updates to their software. Rather, IoT devices will be knitted into a system that learns and evolves over time. Commercial pressures will dictate that such systems are brought to reality as a service.
IoT will allow for new forms of decision-making prompted by events and/or triggers that are initiated by IoT sensors. The sensing IoT devices - whether monitoring the garage door, regulating Fido’s dog food consumption, or watching for rainfall in a wheat field - will communicate their observations. Some devices may take actions autonomously as well, but they will still communicate.
Once prompted by an IoT sensor, decisions will be based on input from multiple sources. These sources will include other IoT sources, contextual factors (e.g., time of day, environmental conditions, etc.), and relevant sources of insight. That’s the “correlation” reference in my requirements list.
As each system records decisions and related effects, it will learn.
This simplistic portrayal, which can be described for any number of examples, forms the ideal framework to industrialize, standardize, and scale as a service. In fact, even via “As A Service” models that exclude IoT - such as processing financial transactions, administering payroll, or monitoring compliance with regulatory policies - the same essential steps are taken. This is basic systems discipline: input, process, output.
The IoT to “As A Service” linkage comes most prominently at the point of defining the business model. Every device manufacturer who is thinking about Internet-enabling their products must define the ways through which their devices are part of a new service value proposition. That “As A Service” ecosystem may be a proprietary platform that is unique to the manufacturer. More likely, it will be part of a broader ecosystem that involves other forms of devices and services.
Does anyone think that the clever new thermostats that provide remote control of room temperatures are going to remain constrained to that functionality? I doubt it. Temperature-As-A-Service isn’t bold enough.
I am seeing more and more IoT examples that carry the attributes of an “As A Service” mode of operation. These include a broad set of features that I will describe more completely in a future post, but which include:
● Functional modularity
● Data security/Integrity
● Open interfaces (APIs)
● Dynamic capacity provisioning
● Workflow integration
● Committed services roadmap
● Little capital outlay
● Contractual flexibility
● Operating resilience
● Dynamic denial of service resilience
● Usage/transactional pricing
Peter Allen has many years of operating experience as a top executive and strategic advisor for companies of all shapes and sizes, with focus on technology-enabled business services. He is now a Boston-based Managing Director at Alvarez & Marsal.