The Opportunity and the Challenge of IoT Use Cases

The Internet of Things (IoT) is the next stage of digital transformation and represents an incredible opportunity for organizations. How big of an opportunity, you ask? Well, how big of an opportunity was the smartphone and all the products and services enabled by it? Over the last few decades, we’ve brought just about every human adult online with the smartphone (4.7 billion people with smartphones today). IoT is about bringing everything else in the physical world online via IoT devices, from cars and cell towers to fuel tanks, medical equipment, and more. How many things will we bring online? No one can say for sure, but just a few decades ago only a few people would have believed that everyone would have a mini computer in their pocket. I think we are only at the beginning, and the end-state will be when the majority of the physical world is made digital. Let's take a look at some IoT use cases and current challenges.

IoT Development Trends

There are four trends that are all working in tandem to accelerate the development and adoption of IoT-enabled applications:

1. Better hardware (sensors, batteries, and chips) means smaller, lower-cost, and better-quality devices.
2. Increased public and private wireless network deployments mean more connectivity options, greater coverage, and lower costs.
3. Compute and storage is getting cheaper and more accessible which means it is more efficient to process and store growing volumes of data.
4. The rise of powerful IoT application development platforms is decreasing the cost, expertise, and time required to develop IoT applications.

The opportunity in IoT is absolutely massive, and the companies that can successfully take advantage of the value of IoT offers will take great strides relative to their competition. However, there are two overarching challenges when it comes to success in IoT: focus and timing.

IoT Challenges

#1: Focus

I both like and dislike the term IoT. I like the term IoT because it captures this mega trend that is playing out across every industry with physical operations. It is a useful shorthand for saying that we are bringing the physical world online and there is immense value to be created and to be captured.

However, I dislike the term IoT because it is so broad. It is a confusing generality that lacks specifics and conflates many different pockets of innovation with each other. There is no one-size-fits-all IoT solution and very different technologies are required depending on the particular IoT use case. Every company and every individual has different strengths, and must therefore prioritize how those strengths are leveraged and how those resources are allocated. To succeed in IoT, you must decide which use cases to focus on.

#2: Timing

I believe that the end-state for IoT is effectively bringing everything physical online, but that doesn’t mean everything can be or will be brought online at the same time.

Available technologies and viable IoT use cases have a circular relationship. As technologies improve and new technologies are developed, new IoT use cases become viable. The financial returns from successful use cases drive investment in the improvement and development of new technologies. The improvement and development of new technologies mean that even more new use cases become viable. You can see how this cycle continues.

The challenge is timing. Pursue a use case too early, and the technologies won’t be ready to support it. Pursue a use case too late, and competitors will have a significant advantage over you which can also result in failure. To succeed in IoT, you must decide when the timing is right for a use case. 

Right Time for Your Use Case

How do you ensure that you focus on the right use case at the right time? We will equip you with the right frameworks and mental models to increase your chances of success. First, it is important to understand the different kinds of value that can be created by IoT solutions. We will cover this topic in the next article, including six ways IoT solutions create value and how value is unlocked in several phases.