Key Components of IOT (Internet of Things)

IDC Introduction: IDC believes that healthcare innovation can be leveraged from other industries. Our guest contributor in this blog post is a technology expert in the Energy and Healthcare industries.

Getting a handle on IOT can be complex. There are many components needed to create an end to end solution. The following is some more detail on the emerging IOT revolution. According to Doug Davis, SVP/GM IOT who is driving the IOT platform strategy at Intel, the internet of things is an evolution of computing, devices connected to the internet, that are generating huge amounts of data, integrating compute into the process end to end and requiring new analytics to operate on that data. Three major domains within the Intel IOT include:

Mobile internet of thing connecting via mobile network
Home based internet of things
Industrial internet of things

There are important economic factors that are driving the IOT revolution

In the last ten years the cost of key components of IOT have been reduced dramatically:

Cost of sensors come down 2X
Cost of bandwidth has come down 40X
Cost of processing has come down 60X

According to McKinsey & Company, the number of connected devices has increased by 300% in the last five years. Cisco predicts 50 billion connected devices by 2020. So what are some real life examples of end to end iot solutions? A good example is Di-BOSS, a digital building solution and the Siemens smart parking solution. In the Di-BOSS example people generate heat so for a commercial building the air conditioning is also a function of occupancy. By correlating these variables in real time savings can be made. Savings added up to almost $1 / square foot per year!

Intel are architecting an Intel platform that takes IOT all the way to the cloud. To create an end to end solutions requires a set of capabilities:

Security
Connectivity and provisioning
Normalize data
Actionable analytics
Ability to monetize IOT end to end solutions

This is key to accelerating solution development. The platform architecture allows innovation by providing a platform that abstracts away some of the complexities of IOT.

Another key component for Intel is the wind river edge management solution which is focused on allowing companies to rapidly develop end to end IOT solutions. The paradigm for IOT is the "edge + the cloud". Given the scale and rapid growth expected in IOT it will be impractical to built "on premise" cloud. Indeed a big component of IOT in the cloud will be big data analytics. The market for big data analytics world wide is expected to grow from $13billion in 2013 to $41billion in 2018 for example according to IDC. This will lead to a self reinforcing feedback loop as more and more edge devices drive new services and ever larger cloud based services. Another crucial element to the internet of things is the integration of the IOT Gateway and the edge management software like Wind River Edge Management System which provides cloud connectivity to facilitate device configuration, file transfers, data capture and rules-based data analysis and response on the gateway and in the cloud.

The final element is the ERP system. That is where S/4 HANA comes into play. No doubt big data analytics is important as well, but the integration of a real time, internet connected.

S/4 with IOT will be the game changer for the 80% of global companies running SAP.

For many companies the integration of their core ERP processes with IOT will be truly revolutionary. The big barrier is the ROI calculation for most enterprises. SAP S/4HANA is the biggest announcement SAP have made since R/3 in 1992. It is a significant event for the business economy of the world as a whole, and a very significant event for SAP customers.

The biggest challenge customers are facing is tackling the ROI for IOT, S/4 and Business networks in terms of business and IT transformation as well as putting a realistic migration plan in place. Speed is of the essence but for many of these customers, however they are stuck in uncertainty not knowing how to move forward.

The IOT and S/4 revolutions is happening now. Companies need to rapidly assess the impacts of S/4, IOT and B2B/Business Networks on their business or they risk being left behind.