How to Future-Proof Your IoT Infrastructure Investment
Benson ChanBenson Chan
For all the value and disruptive potential that Internet of Things (IoT) solutions provide, corporate buyers face a dilemma. Today’s IoT technologies are still immature point solutions that address emerging Applications with evolving technology standards.
Buyers are concerned that what they buy today may become functionally or technologically obsolete tomorrow. Faced with this dilemma, many defer buying even if the IoT solutions they buy today offer tremendous value to their organizations.
This post discusses a planning strategy called “future-proofing” that helps managers, buyers, and planners deal with obsolescence.
For example, today there are multiple Low Power Wide Area Network (LPWAN) connectivity options – SigFox, LoRa, RPMA (by Ingenu), Symphony Link (by Link Labs), NB-IoT and LTE-M. While each option has advantages and disadvantages, a subset of these will eventually “win” out as technology standards, business models, and Applications emerge.
Similarly, there are 350+ IoT platforms in the marketplace today. While many of these platforms target specific applications and industry segments, consolidation is inevitable as there are more vendors than the market can eventually support.
The major IoT platform vendors (Amazon, Microsoft, Google, IBM, GE, et al), currently on a market share land grab, will drive consolidation when they begin to acquire select vertical platforms to gain rapid access to those markets.
Because of the high cost of enterprise technologies, many buyers perceive obsolescence as bad. To them, future-proofing means keeping the technology as long as possible in order to minimize costs and maximize return on investment (ROI).
Their companies have standardized their business processes, policies, and even their technical support on the technologies that they have bought. When a solution goes End of Life (EOL) and transitions to a newer version, it means that managers will have to recertify and retrain everyone on the “new” solution all over again.
In general, transitions happen over a period of months (and sometimes years) in large global companies. During this time, multiple generations of the solution will co-exist, with each requiring different processes and policies.
In today’s fast moving IoT market, planned and unplanned obsolescence will be the norm for the foreseeable future. The traditional concept of “future-proofing” doesn’t apply, and can lead to significant, adverse business disruption.
In the era of cloud based solutions and IoT, future-proofing is not about outguessing the future, and choosing the “right” solution so as to never have to “buy” again. Nor is it overbuying technology now to avoid buying in the future. Finally, future-proofing is not about avoiding change.
Future-proofing is a solution lifecycle management strategy. It is a continuous process to maximize solution flexibility and options, while making deliberate choices and managing risk.
A properly designed future-proof plan provides the organization with options and flexibility, rather than lock-in and risk. It prevents suboptimal decision-making by managing the infrastructure on a system level, rather than at the individual component level.
Future-proofing your IoT infrastructure is a three step process (Figure Two). It is not a “once and done” exercise but must be done annually to remain relevant.
The actual classification of the IoT infrastructure solutions into one of the categories is determined in conjunction with IT, operations, and the business units. Key considerations for determining the “future-proof category” include:
The terms sourcing and buying are sometimes used interchangeably, but they aren't the same. Sourcing is about ensuring strategic access to supply while buying is more transactional. In executing the future-proofing plan, procurement managers must understand the supplier product lifecycle, and develop specific tactics.
As an example, a large global company decides to standardize around a specific IoT edge device (and specific generation) and technology for the next five years. In order to maintain access to this supply during this time period, it employs a number of tactics, including:
However, as vendors transition to newer technology and solution versions, buyers may find limited support and expertise. This problem is amplified the further you are from the original end-of-life date.
To keep the infrastructure and solutions fully operational during this time, companies must employ various reactive and proactive tactics. Some of these include:
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