Technology changes have redefined what it means to design, build and deliver secure products to market, but the changes do not end here. The business of technology has also changed. A new set of market dynamics has emerged, impacting adoption, customer relationships, and partnerships.
Market Adoption Curves
Adoption of IoT products and services are not following the S-curve adoption model that is common for most technology innovations. Instead adoption is vertical-specific, as each industry adopts IoT at different rates over varying periods of time. This reflects the nature of IoT as an enabling technology and a tool for service innovation, the pace of which is driven at an industry level. Bringing a new product or service to market requires a deep understanding of vertical-specific user needs and pain points.
Partnerships and Ecosystems
Partnerships and ecosystems are critical in the third wave, because delivering value requires vertical market knowledge, involves integrating across multiple technologies boundaries, and depends on the ability to support physical products combined with a software service. Few companies have this set of capabilities in-house.
Moreover, the IoT is a combination of hardware, software and systems that are typically integrated into a single solution. This requires an understanding of how the value chains for physical goods and software services overlap and intersect. This new product class is in fact a set of devices tethered to software services. The solution can improve and evolve over time without having to replace or renew the physical product itself. For product developers and providers, this means having the capabilities and partnerships in place to serve the market with a more complex offering.
How to Succeed in the Third Wave
With new products to build, a new architecture to design for, new software and security skills to master, and new market dynamics to navigate, the prospect of getting involved with the third wave may seem daunting. Most organizations currently lack the skills and capabilities to build, launch, and manage third wave products and services. However, partnering to find highly specialized capabilities and knowledge with an eye to developing those skills in-house are the key to finding early success in the third wave.
Instrumentation, connectivity, and cloud are critical elements of the third wave. Connectivity between heterogeneous products is increasingly important for winning and retaining customers. We have lived through the pains wrought by incompatibility between products during the first and second waves of computing. Those painful lessons will not be easily forgotten. Success means designing for connectivity with products that support data sharing and compatibility. It is critical to understand connectivity in this larger context, or risk missing the mark as adoption matures and market demand increases.
Success in the third wave goes beyond launching individual products. The design of end-to-end solutions means understanding how to leverage the flexibility and power of a distributed architecture on a case-by-case basis. For example, the design of products for a smart home will differ from products for smart vehicles. As the Internet of Things matures, common functions and capabilities and standards may emerge across multiple verticals, allowing builders to leverage common building blocks. However, for now, those commonalities remain elusive.
The third wave of computing is upon us and it is real. It is changing businesses and will ultimately change all industries. Charting the new market dynamics created by this third wave requires new capabilities and skills. It requires an understanding of vertical industry use cases, and skills in the common elements to the third wave, namely sensing, connecting, thinking, and expressing. For most firms, this will require a new set of partners who can help imagine the opportunities, instrument and build the sensing and actuating end-points, and connect those end points in a way that is valuable for users.
As a business community, we have taken the first steps on the path to the third wave. Some firms are already seeing a return on their investment, particularly in applications that are driving cost efficiencies. Ultimately, a lot more value will be derived from new products and services that are enhanced by a sensor-generated data layer, and from a completely new class of data products that can only be imagined today.
Editor’s Note: This is the fifth in a five-part series on #IoT #Engineering trends that will shape how companies design, build, and bring products to market. To learn more, please register here to meet with our team at #MWC15.
For more perspective on IoT product engineering, please click here to access Aricent’s full white paper titled, “Never Mind the IoT, Here Comes the Third Wave.”