A senior executive from Ericsson recently started a discussion about horizontal IoT platforms. Horizontal IoT platforms are general-purpose platforms. They include reusable functions to support applications in many different industry verticals. Horizontal platforms look appealing in concept. However, a common criticism is that they are a distraction from immediate needs. They might also compromise on the specific needs for vertical use cases. Somehow, this implies a suboptimal solution.
The advice to solution providers from Ericsson’s Rob Tiffany was to start solving specific problems related to connected intelligence that are customer pain points. Customer pain points are an appealing way to tackle IoT applications: They capture management’s attention. They provide organizational focus. Their boundaries are cleaner, making for a straightforward business case. And, successful implementation yields immediate and visible results.
But should that be the end of the debate? No, not in a market where industrial organizations are still learning about IoT.
Keep in mind that IoT technologies cover topics that are outside the core competencies of many industrial organizations. Moreover, while near-term solutions are good, their knowledge deficit means that longer-term considerations are not even on the radar. Think of the typical IoT pilot project or the IoT solution team working on a well-defined use case. How many of them are planning ahead for second-generation requirements? How many are thinking about the need to scale up and support multiple applications? What about interoperability for cross-silo applications or opening solution stacks to partners in an extended value chain? And how about secondary uses and business models for IoT data?
Strategy is more important than IoT technology
A growing school of thought argues that organizations need to take a strategic approach to their IoT deployments, one that emphasizes horizontal capabilities. Rami Avidan, now of Deutsche Telekom’s T-Systems business unit, talked about strategy rather than technology as the critical challenge of enterprise IoT adoption. He explained the choices that businesses face. An organization will have fast results if it is selling a service that gains uptake rapidly. Conversely, if an organization is digitizing a factory, that’s not a quick fix. The work involved in deploying sensors, linking them, optimizing the data and changing the behavior of machines is a long-term process.
He also pointed out that partners, ecosystems and standardization are three critical elements in delivering viable solutions. Partners are essential because there are so many elements in delivering an IoT application; no single organization has mastery over all of the solution elements. Ecosystems represent environments where partners have laid the groundwork to collaborate. This eliminates many of the technical pitfalls. Ecosystems also provide workable commercial models and solution templates. Standardization addresses longer-term benefits by providing clear rules of engagement on technologies, notably in the area of security.
There is a broader recognition about the value of IoT standardization. Here is a recent viewpoint from Enrico Scarrone, who works for Telecom Italia Mobile and is the Steering Committee Chair of the oneM2M standardization initiative. His observations describe the impact of fragmentation and integration costs on the viability of IoT solutions. This may not matter to some companies — they will focus on commercial imperatives and use a quick, off-the-shelf solution that meets their application needs. Others companies will decide that product sustainability is more important. In this case, they will opt for a standards-based system. As Scarrone observed, there is not a default decision that works for all companies and differing product timeframes.
The consequences for purely vertical thinking, however, are to build downstream switching or systems integration costs into IoT applications. With horizontal thinking, some of those costs are brought forward in time. That probably implies a financial and time-to-market penalty. On the flip side, it encourages designers, operators and mangers to consider sustainability issues. This covers the potential to extend their IoT applications and to look for expansion opportunities arising out of cross-silo possibilities.
For companies adopting IoT concepts into their business operations, the question is whether they are in it for the short of the long haul.
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